Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

PRIVATE BUSINESS

BELFAST CHARITABLE SOCIETY BILL [Lords]

Read the Third time, and passed.

CITY OF WESTMINSTER BILL [Lords] (By Order)

Order for Third Reading read.

To be read the Third time on Thursday 18 July.

ORDER OF BUSINESS

Madam Speaker: I have a short announcement about today's Opposition business. I understand that it is intended that the motions should be dealt with in the following order: the first debate will be on Ministry of Defence housing; and the second debate will be on energy policy. They will not be taken in the order that is shown on today's Order Paper.

Oral Answers to Questions — HEALTH

NHS Nurses (Recruitment)

Mr. Jack Thompson: To ask the Secretary of State for Health what efforts his Department is making to recruit nurses to the NHS. [35782]

Mr. Khabra: To ask the Secretary of State for Health what recent representations he has received regarding the supply of nursing students. [35783]

The Secretary of State for Health (Mr. Stephen Dorrell): My Department continues to promote a range of initiatives designed to attract suitable, high-calibre recruits to the nursing profession.

Mr. Thompson: The Secretary of State must recognise that there is a severe shortage of nurses. Does he recall that, in 1983, 37,000 nurses qualified? His Department predicts that in 1997–98, only 9,000 nurses are likely to qualify. Is that not a disgrace, given the pressure that it puts on nurses in the national health service? Why did he not take notice of the Royal College of Nursing's recommendation two years ago when it warned him of the shortage?

Mr. Dorrell: First, what I take notice of on the question whether there is a shortage of nurses is the independent

review body, which examined the matter and published its report earlier this year, together with the finding that there was not a generalised shortage of nursing staff in the NHS, although there are localised shortages of nurses with particular skills. The figures that the hon. Gentleman quoted are wrong. It is not true that 35,000, or even 37,000, nurses qualified each year in the 1980s. The figure for nurses going into basic training in the 1980s oscillated around 15,000 a year—a figure to which we are returning in the commissions that we are planning for this year.

Mr. Khabra: Does the Minister acknowledge that the drop in nursing student numbers, combined with increased demand, has caused nursing shortages? Is there any evidence that the 14 per cent. increase in commissioning of training places will be sufficient to meet future demand for nurses?

Mr. Dorrell: I hoped that the Labour party would welcome last year's 8 per cent. increase in the number of nurses going into basic training. This year, there is a further 14 per cent. increase in the number of basic training commissions. That takes us back, as I told the hon. Member for Wansbeck (Mr. Thompson), to roughly the same level of new commissions for basic nurse training as existed in the 1980s. Since then, there has been a dramatic improvement in nurse training because of the introduction of Project 2000, which has led to a reduction in the number of training nurses who drop out of training because they find it unsatisfactory.

Sir Roger Sims: Is my right hon. Friend satisfied that NHS hospitals can provide not only refresher courses but sufficiently flexible terms and conditions for nurses to encourage the return to the NHS of qualified nurses who may have left to start families and who are now able and willing to give more time to nursing?

Mr. Dorrell: My hon. Friend is on to a very important point. If we are to ensure that we have the skilled people we need to deliver modern health care, we must of course have a proper level of training, but we must also ensure that NHS trusts are good employers. My hon. Friend suggests some important ways in which we can ensure that we have a well-motivated, fully trained work force. The moves that the Government are making on more locally determined terms for nurses' employment are an important enabling step down the road that he rightly points out.

Sir Anthony Durant: Does my right hon. Friend welcome the number of nurses who are now working in GP practices that are going in for primary care—a move that takes the strain off hospitals?

Mr. Dorrell: Yes, I can certainly join my hon. Friend in welcoming the huge growth in primary care nursing over the past 10 years. The number of practice nurses working in primary care 10 years ago was just under 2,000, but it is now 9,000. That is a fourfold increase in the nursing profession's commitment to primary care, which—as my hon. Friend rightly points out—is an important part of the health service.

Mr. Simon Hughes: Whatever the recruitment figures may have been last year, does the Secretary of State admit


that, this year, there has been a triple blow to the morale of nurses in the health service? First, there was an independent recommendation on nurses' pay, to which the Government responded by giving nurses a pay rise below the rate of inflation. Secondly, huge amounts of time and money have been taken out of the health service by negotiating settlements on a local level. Out of 500 trusts, fewer than 200 have yet made offers. Thirdly, last week, although the Government recommended restraint to the House, they recommended that hon. Members vote a pay rise for themselves that is greater than the rise that they recommended for nurses. Nurses' morale is going down daily. What will the Secretary of State do to recover it—or is he absolutely oblivious to the problem?

Mr. Dorrell: The hon. Gentleman is wrong on every one of the points that he made. The Nurses and Midwives Pay Review Body made a specific recommendation, which the Government accepted in full and are implementing. It is not true to say that the Government have introduced a nurses' pay settlement that is below the rate of inflation. The Government have accepted the recommendation of the independent review body that there should be locally determined pay for nurses, with a 2 per cent. floor to ensure that every nurse gets a basic minimum increase.

Mr. Harry Greenway: Does my right hon. Friend recall the days of that nurse of all nurses, the matron? Will he advocate the return of the matron to hospitals when it is possible and appropriate?

Mr. Dorrell: My hon. Friend is right to point out the importance of professional leadership in the nursing profession, and the matron is one element that, in some trusts, has been found to be a means of achieving it. The most direct answer to the questions of my hon. Friend and of the hon. Member for Southwark and Bermondsey (Mr. Hughes) is to remind them and the House that, since 1979, nurses' pay has risen by more than 70 per cent. in real terms. That reflects both the commitment to nursing that my hon. Friend seeks and the commitment to proper pay for which the hon. Member for Southwark and Bermondsey argues.

Mr. McLeish: Will the Secretary of State now accept that a real crisis is facing nursing in Britain? Will he explain to the House why nurses' morale has slumped, why nurse recruitment has collapsed and why the Government are still spending more new money on bureaucracy than they are on nurses? Will he also tell the House why uncertainty in the workplace is driving more NHS nurses away from providing valuable services? Today, will he announce that he will launch a national recruitment campaign to tackle the problem? Will he initiate talks with the Royal College of Nursing and nursing unions about the immediate crisis? Will he stop squandering the most precious asset of the NHS—its human resources? Nurses deserve better from the Government, and surely they should be getting some action from the Secretary of State.

Mr. Dorrell: The hon. Gentleman has to square his rhetoric with reality. He talks about declining recruitment in nursing. In 1994–95, the figure for recruitment into nurse training was 11,400 commissions; this year, there

are 14,300 commissions. I defy the hon. Gentleman to square an increase from 11,400 to 14,300 with his rhetoric about declining recruitment. His rhetoric is nonsense, and the hon. Gentleman knows it.

Health Authorities (Market Testing)

Mr. Michael Brown: To ask the Secretary of State for Health if he will make a statement on market testing by health authorities. [35784]

The Parliamentary Under-Secretary of State for Health (Mr. John Horam): Market testing by trusts has proved very successful in generating savings for the national health service. Approximately £1 billion has been saved since it started. Health authorities are increasingly using the same techniques, although the available alternative would normally be an NHS trust.

Mr. Brown: Can my hon. Friend confirm that South Humber health authority intends to submit the ambulance service to market testing? While I accept and acknowledge that savings can be made, will he confirm that the health authority has no preferred option until the Humberside ambulance service has had an opportunity to ensure that its service is tested so that the benefits so far obtained can be acknowledged by the health authority?

Mr. Horam: I can confirm that there is no preferred option. I am concerned to ensure that, in such instances, there is absolutely fair play. I have gone into those and other instances carefully. Accusations of unfair play are usually made on behalf of the bidder, not the existing provider. I assure my hon. Friend that the regional office will ensure that there is fair play in the case that he mentioned.

Mr. Corbyn: Does the Minister recognise that a consequence of market testing at Hillingdon hospital in west London is that 54 cleaners, some of whom have worked there for 30 years, have been dismissed by the Pall Mall Services Group for refusing to take a pay cut of £35 a week? Does he not think that market testing is responsible for poverty wages for loyal workers within the national health service? Should not those 54 cleaners be reinstated on national health service conditions and repaid for the whole period for which they have been out of work because of the Pall Mall group's determination to make profits at the expense of loyal workers in the NHS?

Mr. Horam: On the contrary, the Pall Mall group, which adequately resources all the services that it provides, gives the workers in question rates that are above the nearest comparator—Heathrow. In the circumstances, they are well paid for the work that they do. In addition, they all received a lump sum to do away with the work restraints that they were putting on the service.

Mr. Tredinnick: Will my hon. Friend confirm that the money saved through market testing is in addition to the extra money that the Government have made available for the health service? Will he also confirm that the Opposition have pledged not a penny of additional money for the health service?

Mr. Horam: My hon. Friend makes a fair point. The £1 billion that has been saved since 1983 as a result of


successful market testing, which has not only saved money but improved quality in many cases, should be set against the paltry £100 million which the Opposition allege that they could save and thereby transform the health service. They should make it plain what we would lose through that "efficiency" if ever there were a Labour Government, not what they would hope to gain.

NHS Administrative Costs

Mr. Trickett: To ask the Secretary of State for Health when he last met the chairmen of health authorities to discuss administrative costs. [35785]

Ms Quin: To ask the Secretary of State for Health what proposals he has to reduce bureaucracy in the NHS. [35787]

Mr. Roy Hughes: To ask the Secretary of State for Health if he will make a statement about administrative costs in the NHS. [35795]

Mr. Dorrell: Our programme to streamline NHS management will release £300 million for patient care over the two years ending next March.

Mr. Trickett: Does the Secretary of State accept that the internal market has proved to be a bureaucratic nightmare, which the British Medical Association estimates costs £1.7 billion a year? Will he confirm that, since the baseline of 1989, 20,000 new managers have been put in post at the cost of 50,000 nurses? Is he aware that the cost of that additional bureaucracy to the people of Hemsworth is £2.6 million? The people of Hems worth want not pen pushers but nurses and better clinical care.

Mr. Dorrell: Both the statistics that the hon. Gentleman quotes, although much beloved of Labour Front-Bench Members, are simply wrong. First, the hon. Gentleman says that there are 20,000 new senior managers. As the hon. Member for Peckham (Ms Harman) knows well, even if the hon. Gentleman does not, that is a new classification, which was introduced in the mid-1980s. If Labour Members really believe that there was no senior manager in the health service before 1985, they are in a tiny minority. It is clearly absurd. The 20,000 new senior managers is a nonsense statistic, and the hon. Lady knows it. Secondly, the only way in which the hon. Lady can concoct the statistic of 50,000 fewer nurses is by including trainees in 1984 and excluding them in 1994. If one takes honest figures over those 10 years, the figure is not 50,000 fewer, but 20,000 more nurses.

Ms Quin: Given what the Secretary of State has said, why does he think that the BMA and others are so strongly critical of the spiralling costs of administration and transaction? Can he share with me the anger that my constituents feel when they see patient services such as urology services under threat in the local hospital, and when valued local facilities are in danger of being transferred to less convenient neighbouring hospitals? What does he have to say to my constituents about that?

Mr. Dorrell: I have two things to say to the hon. Lady and her constituents about administrative costs in the health service. First, those costs have grown because, as

the hon Lady's predecessor—the right hon. Member for Derby, South (Mrs. Beckett)—acknowledged, the traditional NHS was undermanaged. Secondly, let us consider how much they have grown. The numbers of administration and clerical staff in the health service have increased by 22 per cent. in 10 years. To put that in perspective, the numbers of medical and dental staff in the health service are up by 21 per cent.—almost the same percentage in the same period. The numbers of professional and technical staff of the health service have increased in the same period by 28 per cent. During that period of growth of investment in management, there has been a 41 per cent. increase in patient treatments in the health service. That is the context that the hon. Lady should point out to her constituents.

Mr. Hughes: When will the Secretary of State recognise that the NHS is now suffering from the disease of bureaucracy, and that its complications include waste and secrecy? For instance, in Gwent, a lady manager's employment was terminated and she received £35,000 in compensation, but a few days later she was re-engaged, at a salary of £39,000 per annum. Surely such money would be better spent on more, and better-paid, nurses and on re-opening the wards that have been closed in recent years?

Mr. Dorrell: The problem that the Labour party faces in talking about management and administration costs in the health service is that Labour Members voted against £100 million of administrative savings in the health service when they opposed the abolition of regional health authorities. The hon. Member for Peckham has offered the population a recantation for a mistaken vote on the regional health authorities. She recognises that Labour Members made a mistake in not taking that £100 million and she is now on the verge of apologising to the electorate for their failure to take a £100 million saving that was available.
The Government are well ahead of the hon. Member for Peckham. Not only have we taken that £100 million, but we have put in place clear plans to deliver an additional £200 million—£300 million of administrative savings. The hon. Lady offers a paltry £100 million, which she opposed when the opportunity presented itself.

Mrs. Roe: Has my right hon. Friend received any representations from Labour Front Benchers regarding his 5 per cent. cut in NHS administration costs, which are already amounting to about £140 million? Does he know whether the Labour party thinks that this is too much, too little or just right?

Mr. Dorrell: When I announced £140 million extra saving through tight controls on bureaucracy in the health service, as my hon. Friend rightly says, Labour Members dismissed it as too little. Nine months later, they presented a programme designed to deliver not £140 million, but £100 million.

Mr. Peter Atkinson: Will my right hon. Friend join me in condemning the incessant attacks on national health service managers? Does he agree that the national health service was undermanaged for many years and that managers are now delivering a more efficient, cost-effective and better health service?

Mr. Dorrell: I entirely agree with my hon. Friend. Earlier, I quoted figures that show that there has been an


increase in the number of medical, dental and nursing staff in the national health service, and that there has also been an increase in the number of administrative support staff. As a result, patient treatment is growing faster than any of the statistics.

Mr. Barry Field: Does my right hon. Friend agree that, in the right circumstances, the best way to save taxpayers' money and to ensure that it goes to patient care is to amalgamate trusts? Can we expect an early and quick decision on the amalgamation of the trusts on the Isle of Wight? We are all in favour of it and we want to see it get under way as soon as possible.

Mr. Dorrell: I will not make an announcement from the Dispatch Box this afternoon in relation to my hon. Friend's request. However, I say to my hon. Friend and to trusts that are contemplating merger proposals that there are very few administrative savings available to trusts that merge that are not available to the same trusts if they choose to organise their affairs differently while remaining separate. What I look for in proposals to reorganise patient care is improved patient care, not simply changed bureaucratic arrangements.

Ms Harman: Will the Secretary of State admit that even though he promises to cut back on the £1.5 billion in extra bureaucracy, he cannot unless he scraps the system that is creating it: the internal market? Is it not cynical of him to demand fewer managers while promoting a system that requires more managers? Will he admit that the right way to ensure minimum bureaucracy is to scrap the annual contracts, scrap the extra-contractual referrals and the protocol compliance, scrap the hundreds of thousands of invoices every year and scrap the national health service internal market?

Mr. Dorrell: On behalf of the hon. Lady's many friends on the Government Benches, I wish her well in her campaign for re-election to the shadow Cabinet. I extend the sympathy of every Government Member to the hon. Lady because of the predicament in which she finds herself. She would dearly love to be able to offer more money to the health service but her Presbyterian colleague, the shadow Chancellor, will not let her do that. He has left her making bricks without straw.
The hon. Lady referred to management costs. One day, she says that £1.5 billion can be saved in management costs, and then I point out that that is more than half the total that we spend; the next day, she cuts the figure to one fifteenth and £1.5 billion suddenly becomes £100 million. The inconvenience with £100 million is that it is one third of the amount that the Government are already committed to save.

Sir Sydney Chapman: Notwithstanding the huge reductions in administrative costs brought about by the abolition of the regional health authorities, will my right hon. Friend confirm that increased administrative costs elsewhere in the NHS have led to better management and to more patient treatments? Will he look at how much further the clerical and paperwork undertaken by hospital doctors can be cut, even if it means employing more administrative staff?

Mr. Dorrell: My hon. Friend has raised an important point that is easily overlooked. I have emphasised that there has been a 21 per cent. increase in the number of medical and dental staff in the NHS over the past 10 years. If we do not provide administrative support to those doctors and dentists, they end up doing it themselves instead of delivering patient services. My hon. Friend is quite right: if we want an efficient use of the resources available to the health service, we have to provide administrative support staff as well as professional staff.

Doctors (Recruitment)

Mrs. Bridget Prentice: To ask the Secretary of State for Health when he last met chairmen of health trusts to discuss the impact of levels of health expenditure on the future supply of doctors from universities.[35786]

The Minister for Health (Mr. Gerald Malone): I have frequent meetings with chairmen of national health service trusts to discuss a range of issues, including how best to utilise the £459 million that trusts receive in recognition of the additional costs of teaching undergraduate medical and dental students.

Mrs. Prentice: Does the Minister agree that the Government's university funding cuts are having a severe effect on medical schools and, therefore, a direct impact on patient care? Is it not just plain folly for the Government to think that they can continue to cut medical school funding without ensuring that there will be a severe shortage of doctors in the future in the national health service?

Mr. Malone: The conclusion that the hon. Lady reaches is quite wrong. She recognises a point that was made by the House of Lords Select Committee on Science and Technology in its report last year. The Government responded to the report by asking the Committee of Vice-Chancellors and Principals for its view. That is why we set up the Richards review, which will report in due course. It will look at issues such as work load pressures, recruitment difficulties and future NHS support for new posts. The Government's continuing medical education policy aims to build upon the number of existing students. That is why we have announced an increase of 500 students before 2000, in order to build on our excellent record of creating more hospital doctors and more doctors per specialty than ever before.

Dame Jill Knight: Can my hon. Friend confirm that 22,500 more general practitioners and dentists are working in the health service now than in 1979? Is that not a clear result of the Government's unique commitment to extra funding for that purpose?

Mr. Malone: My hon. Friend is right, and that applies to all doctors and to all specialties across the health service. It illustrates the fact that the Government are prepared to back with action our commitment to invest in the national health service—unlike the Labour party, which refuses to put a precise figure on its projected investment in the NHS on a year-on-year basis.

Purchasing Costs

Mr. Orme: To ask the Secretary of State for Health what monitoring he is currently undertaking of purchasing costs. [35788]

Mr. Malone: Our continuing aim is to improve care for patients and to shorten waiting times, while minimising costs. Following our latest scrutiny, we plan to reduce administration costs by £40 million—money that can be freed for wider national health service investment.

Mr. Orme: I make no apologies for returning to the effects of the common market—the internal market—and the impact that it is having in Salford in my constituency. As a consequence, we need more nurses and doctors and more patient care. We do not need the cuts that are now taking place in the national health service as a result of the internal market. What will the Minister do about that?

Mr. Malone: I think that the right hon. Gentleman perhaps returned inadvertently to a feud of yesteryear within his party which might be reflected in present discussions about the health service and how to take matters forward.
I point out to the right hon. Gentleman that, while Opposition Front Benchers talk in absurd terms about £15 billion one day and £100 million the next, the Government have been getting on with pruning bureaucracy where possible. For example, the efficiency scrutiny, "Seeing the Wood, Sparing the Trees", which deals precisely with the purchasing mechanism, will release £40 million for patient care. I thought that the right hon. Gentleman might welcome that.

Mr. Nicholas Winterton: Will my hon. Friend confirm that fundholding practitioners, which are important in purchasing services and treatment, are able to carry over funds from year to year? If that is so, can my hon. Friend explain why trust hospitals and trusts, such as the East Cheshire NHS trust, are not also able to carry over funds from one year to another in order to take account of exceptional circumstances that occur from time to time? That would surely encourage efficiency and enable trusts to meet exceptional costs without difficulty.

Mr. Malone: My hon. Friend, as an expert in such matters, will know that there are controls on both. If GP fundholders manage to make savings in any given year, they are able to adjust—together with the health authority—the plans to purchase additional care for patients. We expect hospital trusts to manage their budgets in a sensible way and, if there are differences from year to year, we expect them to manage that over time.

Cumberland Infirmary

Mr. Martlew: To ask the Secretary of State for Health if he will make a statement on the proposed private finance initiative scheme for the Cumberland infirmary in Carlisle. [35789]

Mr. Horam: The scheme is progressing well. A preferred bidder has been identified and the full business case is expected to be submitted soon.

Mr. Martlew: I thank the Minister for that answer. Does he realise that, when I spoke to the chief executive some three weeks ago, he talked of reducing the number of beds in the new hospital to 450? Since then, pressure has been applied by Cumbria county council, medical consultants and me and, fortunately, that figure has increased to 474—the minimum number necessary. Will the Minister clarify whether any of those beds will be private beds? Will he clarify also the funding of that scheme? It was anticipated originally that the single site would create savings of £1.2 million, but the latest estimate is that there will be a deficit of £500,000. Will that money come from the Government, or will it come directly out of patient care?

Mr. Horam: Let me correct the hon. Gentleman's original point about the number of beds. Two years ago, when the hospital was publicly funded, there were approximately 470, as there are now. There has been no change since then.
As for the hon. Gentleman's point about funding, the health authority and the trust are currently looking into precisely that issue.

Mr. Jacques Arnold: If the PFI system were scrapped, would that not put at risk not only the Cumberland infirmary project in Carlisle but the Darenth Park proposal in my area? Would that risk not arise directly from the scrapping of the system, which is supported by the hon. Member for Peckham (Ms Harman)—who does not propose, and is not being allowed to propose, putting in money from the taxpayer?

Mr. Horam: Absolutely. Many schemes all over the country, of which the Carlisle scheme is one, had to wait for nearly 30 years. They got nowhere with traditional funding. Now we are making progress everywhere. I must tell my hon. Friends that some hospitals would not be built if the Labour party's hostility to the private finance initiative were maintained. The PFI is our only hope when it comes to building some hospitals.

Mr. Barron: Is not the PFI in Carlisle in the same sorry state—the same mess—as it is everywhere else in the country? Have not Ministers been travelling up and down the country making promises, and, as they have in Carlisle, building up expectations on which they know that they cannot deliver? Is it not surprising that even the Prime Minister has been reported as saying that he is particularly anxious about health, no major PFI hospital deals having yet been signed?
Will the Minister now apologise to the House, and to the people of Carlisle and elsewhere, for the 17 per cent. cut in next year's national health service capital programme? Will he tell patients and clinicians in Carlisle, who have been waiting for years, when they will have a new hospital, and when the Government will put their PFI house in order?

Mr. Horam: The hon. Gentleman huffs and puffs a great deal, as he does at every Question Time when this subject arises. In fact, the PFI is proceeding extremely well. It is bringing the prospect of new hospitals, or hospital facilities, to places where such provision could not be envisaged under traditional procedures. One factor which stands in the way of that is the Labour party's


old-fashioned attitude, which cannot conceive of the existence of new, radical measures to deal with the problem. The hon. Gentleman ought to realise that he is backing a loser.

Mr. John Marshall: Would my hon. Friend care to comment on the paradox that, while the deputy leader of the Labour party claims to have invented the PFI, Labour Back Benchers spend their time criticising it?

Madam Speaker: Order. We are getting a long way from Carlisle.

Mr. Horam: We are indeed. As usual, the Labour party is all over the place.

Tuberculosis

Mr. Dalyell: To ask the Secretary of State for Health what steps he is taking to reduce the incidence of tuberculosis. [35790]

The Parliamentary Under-Secretary of State for Health (Mr. John Bowis): The United Kingdom has an excellent record on tuberculosis control, and we are determined that that should remain the case. Most recently, we have published two reports from the interdepartmental working group on tuberculosis, "The Control of Tuberculosis at Local Level" and "Tuberculosis and Homeless People".

Mr. Dalyell: May I ask a question of which I have given notice to the Minister's private office? In what year did the Department of Health first learn of the likely medical consequences—tuberculosis, and other illnesses—of the alleged nuclear incident at Aldermaston in 1958?

Mr. Bowis: One never quite knows where the spirit of Linlithgow is going to land. I am grateful to the hon. Gentleman for giving me notice that he would be stretching the question a little.
The clinical condition of tuberculosis is brought about by exposure to bacterial infection. As I am sure the hon. Gentleman knows, it is not related to exposure to radiation.
The Committee on Medical Aspects of Radiation in the Environment—COMARE—has considered allegations of an increased incidence of childhood cancer around a number of nuclear establishments. Its third report did not include Royal Air Force sites at Greenham Common. In that report, COMARE recommended that a nationwide study of the geographical distribution of the incidence of childhood cancer should be undertaken. The study is under way and COMARE will consider all new data that are available in assessing whether there is an association between local levels of contamination and the incidence of cancer.

Mr. Clifton-Brown: Is my hon. Friend aware of the incidence of antibiotics becoming immune in the treatment of tuberculosis? If so, is there not a case for advising the medical profession to reserve stronger-acting

antibiotics for the serious diseases rather than prescribing them on a more prophylactic basis for less serious diseases?

Mr. Bowis: We have had groups examining these matters. We are aware of drug-resistant TB, and I am happy to say that it is at low levels in the United Kingdom. That does not mean that such TB is resistant to all drugs. It is resistant to some, however, and therefore is more complex to treat. An expert working group has been established to examine these matters and to bring forward recommendations.

Read Codes

Mr. Morgan: To ask the Secretary of State for Health if he will publish his assessment of the rate of progress to be made in implementing Read codes in clinical settings in the NHS by 1 January (a) 1997, (b)1998 and (c) 1999. [35791]

Mr. Horam: Yes. A report will be placed in the Library.

Mr. Morgan: I thank the Minister for his answer. In addition to the widespread concerns about the implementation of Read codes, will he confirm that his Department wrote to Dr. Read's private company, CAMS, last month stating, and I quote—[Horn. MEMBERS: "No."]—that there was a deliberate attempt—

Madam Speaker: Order. The hon. Gentleman knows that there is no quoting during Question Time. Please paraphrase.

Mr. Morgan: Will the Minister confirm that his Department wrote to Computer Aided Medical Supplies—Dr. Read's private company, which is getting a nice little earner out of the NHS—to say that there was a deliberate attempt to deceive the Department of Health's auditors? Does the Minister agree that the time has come to re-examine the relationship between the NHS's centre for coding and classification, which is run by Dr. Read, and CAMS, the company owned by Dr. Read? Should we now consider renaming CAMS as SCAM, as it is making not simply money but illegal money out of the NHS?

Mr. Horam: As the hon. Gentleman knows, the National Audit Office is conducting a preliminary investigation into the arrangements between CAMS and the national health service precisely to examine value-for-money questions and questions of probity. We should wait until that report is clear to decide how we should proceed.

Diabetics

Mr. Pickthall: To ask the Secretary of State for Health what is his estimate of the current number of insulin-dependent diabetics and non-insulin-dependent diabetics in the United Kingdom. [35792]

Mr. Bowis: The health survey for England 1994 estimated that the prevalence of diabetics was approximately 2.4 per cent. Studies suggest that 80 per cent. of people with diabetes are non-insulin dependent.

Mr. Pickthall: Is the Minister aware that the number of new cases of diabetes is rising each year and that the


estimated cost to the national health service is between £1.4 billion and £1.8 billion a year? Does the hon. Gentleman agree that more resources targeted directly at finding the causes, ameliorating and eventually curing diabetes would be a wonderful investment for the NHS, and would in the end prevent much human misery as well as save much public cash?

Mr. Bowis: I agree that diabetes is treated extremely seriously by the NHS. We need to combine treatment, care, prevention and cure where possible, and research is a party to all that. The fact that we have the sub-group of the clinical outcomes group examining the purchaser guidance that should be developed, based on the St. Vincent's task force recommendations, should be of some comfort to the hon. Gentleman. The report is expected at about the end of the year. In addition, both the Medical Research Council and the Department of Health have made about £5 million available for major research projects. That, too, is the way forward.

Mr. Congdon: Does my hon. Friend agree that the chronic disease management programme has been very successful in improving standards of care for people suffering from diabetes?

Mr. Bowis: If I heard my hon. Friend correctly, he said that the chronic disease management programme was playing an important part in that, and I am happy to say that more than 90 per cent. of general practitioners now run this programme for diabetes, which, of course, enables them to keep a register in their surgeries, to see their patients once a year and to check, in particular, the eyes and feet, as recommended by St. Vincent's.

NHS Trusts (Cost Improvement Programmes)

Mrs. Jane Kennedy: To ask the Secretary of State for Health when he last met chief executives of health trusts to discuss the current cost improvement programmes. [35793]

Mr. Dorrell: The regional offices of the NHS executive consider the plans of each trust on my behalf, including efficiency gains negotiated with them.

Mrs. Kennedy: When the Secretary of State next meets Mr. Keith Parsons, the part-time chief executive of Royal Liverpool and Broadgreen University Hospitals NHS trust, will he ask him to explain to the people of Liverpool how he is able to charter an airplane to bring him from a medical conference in Edinburgh to attend the last board meeting of the trust, and then to take him back again, while he is seeking to close four wards in Broadgreen hospital in my constituency, two of which are proving impossible to close because of so-called "over-activity"—in other words, too many orthopaedic geriatric patients who desperately need the services that those wards provide?

Mr. Dorrell: What I will do if I meet this gentleman is congratulate him on the fact that his hospital was the first hospital in the NHS to declare that it had no people on its waiting list waiting for more than 12 months. We might have heard that from the hon. Lady when commenting on the affairs of her constituency.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mrs. Jane Kennedy: To ask the Prime Minister if he will list his official engagements for Tuesday 16 July. [35812]

The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mrs. Kennedy: Today marks the launch of the Gun Control Network by the families of the victims of Hungerford and Dunblane. Will the Prime Minister acknowledge the strength of the case against the private ownership of handguns? Will he accept that such a measure to ban them would receive the support of the overwhelming majority of the British people?

The Prime Minister: I am, of course, aware of the strength of feeling on this issue and of the recent petition calling for strengthened control over firearms. As the hon. Lady knows, the Government have been careful to consult the Opposition parties on this issue from the outset, and I am delighted that, thus far, we have received their firm support for the way in which we are proceeding. Since 1979, we have strengthened firearms controls. As soon as we receive the report from Lord Cullen, we will consider it with great care. I am happy to reiterate to the House that, in the event it is needed, we have preserved a legislative slot to take any action that is required.

Mrs. Lait: To ask the Prime Minister if he will list his official engagements for Tuesday 16 July. [35813]

The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.

Mrs. Lait: In the light of the great news that Lite-On and LG are bringing thousands of new jobs to Scotland and Wales, does my right hon. Friend agree that breaking up the United Kingdom, creating an extra tier of regional government, surrounding it all in bureaucracy and making the Scots pay more tax is likely to scare away potential new investors? Is this not new Labour being new danger?

The Prime Minister: I am delighted to welcome these substantial new investments to Scotland and Wales. They are the latest of a large number of inward investments that we have seen not only in Scotland and Wales but in other parts of the United Kingdom. I certainly hope that we shall get more. They are coming here predominantly because of the economic environment—[interruption]—because this country is an economic success story—[Interruption.] The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) is chuntering in the back row. He seems to forget that they have been coming here for 15 years under Conservative policies, because we have created a combination of lower inflation, lower taxes and lower costs. That is attractive not just to companies in this country but to world investors seeking the right country in which to place their money. I am delighted that they place it here. It would be a tragedy if policies were followed that would prevent them from doing so in future.

Mr. Blair: Does the Prime Minister recall promising the country at the previous general election that he would balance the budget? How does he square that with today's further disastrous borrowing figures which show that, leaving aside privatisation moneys, the Government's overdraft this year is running at a higher level than at the same time last year?

The Prime Minister: If the right hon. Gentleman would look carefully at today's borrowing figures, he would see that they are entirely consistent with the economic forecast and that they confirm the excellent state of the economy—sustainable growth, low inflation and falling Government borrowing. As for comparatives, since 1979, average borrowing as a proportion of gross domestic product has been just under one half as much as under the previous Labour Government.

Mr. Blair: Perhaps the Prime Minister will just confirm that this Conservative Government have received more in North sea oil revenues and from privatising the nation's assets than the borrowing requirement under the last Labour Government. That is what his Government have had. Is it not also a fact that, under his prime ministership, the public debt has doubled? Will he confirm this statistic and answer this question directly: is it not the case that, as a result of his Government's borrowing policies, every family in this country now pays £1,000 a year in tax, not for better services in respect of health, education and law and order but just to service the debt that he has created? Is that right or is it wrong?

The Prime Minister: The right hon. Gentleman is completely misleading the House. He knows what resources have been spent in recent years. I will tell him where they have gone—they have gone on health, education, defence and public services. The right hon. Gentleman is the man who says that he wants to keep taxes down, yet he wants to put public expenditure up. The reality is that, whereas he may play games in opposition, we have to deal with the realities of producing a successful economy, as we have done in recent years and as we will do in the years to come.

Mr. Blair: Not a single one of those figures did the Prime Minister dispute—£1,000 a year in tax just to service the debt. Let me tell the Prime Minister that, if he wants to have a better balance in public spending, why not tackle the problems of long-term unemployment which have put up the bills for people in this country? Is it not the truth—[Interruption.] That is the party that has spent on welfare and unemployment but lowered spending on investment for the country's future. Will the Prime Minister confirm that, if an ordinary member of the public had run an overdraft as large as this, he would have been told that his time was up and his home should be repossessed? Is that not the fate so richly deserved by this Government and this Prime Minister?

The Prime Minister: Dear, oh dear. If the right hon. Gentleman wants to talk about success in dealing with unemployment, perhaps he would care to acknowledge that we have the lowest rate of unemployment of any significant nation in western Europe; that unemployment has been falling for three years, which it has not been doing anywhere else; that every single Labour

Government we have ever been cursed with have increased unemployment dramatically; that he has policies that would increase the costs of employers, which would create unemployment; and that one of his unions is asking for a minimum wage of £6.03 an hour, which would cost an enormous amount in unemployment.
While the right hon. Gentleman is concerned about economic performance, let me mention the things that he neglected to mention: the lowest level of inflation for 50 years; the lowest mortgage rates for 30 years—[HON. MEMBERS: "More."]—four years of falling unemployment and increasing employment—[HON. MEMBERS: "More."]—the lowest rate of basic tax for 50 years—[HON. MEMBERS: "More."]—disposable income rising way above inflation—[HON. MEMBERS: "More."]—No. 1 in Europe for investment—[HON. MEMBERS: "More."]—in the interests of other questioners, I shall stop there, but there is far more to the success of the Government's policies.

Mr. Amess: To ask the Prime Minister if he will list his official engagements for Tuesday 16 July. [35814]

The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.

Mr. Amess: Does my right hon. Friend agree that no responsible Prime Minister would weaken Britain's veto in Europe by giving Brussels more powers to determine matters that should be voted on and discussed in the House? Does not new Labour wish to surrender Britain's veto in Europe? Does not new, phoney Labour mean new, real danger for residents in Basildon, Southend and the whole country?

The Prime Minister: My hon. Friend should not suggest that the dangers from those policies are in only Basildon and Southend. They are in every constituency around the land. He is quite right.
The Government are not prepared to see our veto eroded, as the Labour party apparently is. On issues of national and constitutional significance, any Government should be prepared to protect British interests, if necessary by using the veto and saying no. I regret that the Opposition are committed to undermining the veto. If they say that they are never going to be isolated in Europe, what they are saying is that they would never use the veto whether it was in this country's interests or not. They would follow the line determined by our European partners. That is their policy out of their own mouths, and upon that let them be judged.

Mr. Ashdown: But Britain's national debt has doubled since the Prime Minister took office. Britain's annual debt has doubled against what the Prime Minister said that it would be two years ago. Is the Prime Minister prepared to confirm the words of his own Chancellor of the Exchequer in spring this year when he said that, when public borrowing was around £30 billion a year, tax cuts were irresponsible?

The Prime Minister: As to the Budget, the right hon. Gentleman will have to wait and see. It is some months away. We will deal prudently, as we have always done, with that aspect.
I seem to remember the right hon. Gentleman's party supporting the largest public borrowing that we have ever seen at any stage in this country. Under this Government, the economy has gone from strength to strength to strength. If the right hon. Gentleman is concerned about public borrowing, as I am, I invite him and the leader of the Labour party to support the Government in the public expenditure decisions that we will have to take in the forthcoming public expenditure round. We will judge by their words whether they support the decisions that we will take in the public spending round. If they support restraint, it will be the first time that they have done so.

Sir John Gorst: In view of the industrial relations unrest in the Post Office, will my right hon. Friend give consideration not merely to the suspension of the monopoly but to the application of a law of contract to all parties in the Post Office?

The Prime Minister: I thoroughly agree with my hon. Friend about the likely dangers of a Post Office strike. As he knows, my right hon. Friend the President of the Board of Trade is giving consideration to suspension of the monopoly and I shall certainly consider my hon. Friend's further point.

Mr. Hall: To ask the Prime Minister if he will list his official engagements for Tuesday 16 July. [35815]

The Prime Minister: I refer the hon. Gentleman to the reply I gave some moments ago.

Mr. Hall: The Prime Minister will be aware that last year's tax revenue fell short by a staggering £7 billion. Likewise, last year's public sector borrowing requirement was £10 billion greater than forecast 16 months previously. Does he agree that, if a managing director in the private sector made such an overestimate of a company's income and plunged it into such huge debt, he would be sacked? What is the Prime Minister going to do about it?

The Prime Minister: The hon. Gentleman knows very well the degrees of difficulty in determining tax revenue. Of course, his way of determining tax revenue would be

to support his leader in increasing taxes, with the large range of extra taxes that the Labour party is already planning. He might as well admit it.

Mr. Brazier: To ask the Prime Minister if he will list his official engagements for Tuesday 16 July. [35816]

The Prime Minister: I refer my hon. Friend to the reply I gave some moments ago.

Mr. Brazier: In considering the very sad events in Ulster and welcoming the deployment of extra troops there, I should like to ask whether my right hon. Friend agrees that the overwhelming priority must be the restoration of security, which must involve whatever resources and legal powers the security forces require.

The Prime Minister: Self-evidently, the overwhelming need is to restore normal law and order to the Province so that problems are solved by dialogue and not by violence and confrontation. We must continue to do whatever we can to ensure that the bomb in Enniskillen—whoever turns out to be responsible for it—does not relaunch the cycle of violence that has so scarred life in Northern Ireland in recent years. I particularly welcome the restraint that has been shown by loyalist groups and I very much hope that they will continue to show that restraint in future. The security forces have our full support. They will continue to have our full support in the Province and in the rest of the United Kingdom.

Mrs. Roche: To ask the Prime Minister if he will list his official engagements for Tuesday 16 July. [35817]

The Prime Minister: I refer the hon. Lady to the reply I gave some moments ago.

Mrs. Roche: Given that 21 Conservative Back Benchers have signed an early-day motion expressing serious concern about the sale of Ministry of Defence homes and that one of them described it as a half-baked scheme, deeply upsetting to service families, how do the Prime Minister and the Government justify the sale and the £900 million a year rent bill to the British public?

The Prime Minister: The hon. Lady is mistaken in what she says and in her judgment. The service chiefs support the sale. They have recognised and said publicly that it will raise £1.5 billion in public revenue. The Labour party has said a great deal about public borrowing. Will they vote against the £1.5 billion that the sale will bring into the public revenue and cut borrowing, or will it be another occasion when the leader of the Labour party says one thing and votes in a quite different way?

Points of Order

Mr. Phil Gallie: On a point of order, Madam Speaker. I wrote to you yesterday enclosing a piece of House of Commons notepaper that had been transformed into a Labour party recruiting document. I registered my interest as I felt that I could make valuable use of such documentation in my own constituency. I refrained from doing so, because it is my understanding that it would be a breach of regulations and, as a supporter of law and order, I would not wish to deviate from the straight and narrow.

Madam Speaker: The hon. Gentleman refers to the hon. Member for Edinburgh, South (Mr. Griffiths), who has apologised to me for his misuse of the House emblem and agreed to reimburse the House authorities for all the costs that have been incurred.

Mr. Andrew Faulds: On a point of order, Madam Speaker. I am so relieved that you have managed to recognise an elder Member. The Secretary of State for Health a little earlier used the word Presbyterian in a tone that suggested disapprobation. Would the House and would he recognise that the most principled and the most independent-minded Members of this place are Presbyterians like myself, and proud of it?

Madam Speaker: That is barely a point of order, but as I seldom recognise the aging Member, I was prepared to listen to him today.

Mr. Anthony Coombs: On a point of order, Madam Speaker. I seek your guidance on the ten-minute Bill that the hon. Member for Barking (Ms Hodge) is about to present. As she was the council leader who presided over and covered up the most appalling abuse in homes in Islington, will you rule as to whether she has a declarable interest in introducing the debate?

Madam Speaker: The hon. Lady has no declarable interest. The House should exercise the tolerance that I expect of it and listen to the hon. Lady. I have no idea what the hon. Lady has to say, so I think that we should hear her out.

Mr. Harry Barnes: On a point of order, Madam Speaker. As you know, tomorrow we shall have Trade and Industry questions, and I have Question 2. In consequence, a letter was sent to me, probably inadvertently, by the hon. Member for Swindon (Mr. Coombs), whom I have informed that I intended to raise the matter. The hon. Gentleman's brief letter says:
I should be most grateful if you could spare the time to attend a brief discussion with DTI Ministers at 2.15 pm on Wednesday, 17 July. Your contribution to DTI Question Time at 2.30 pm is much appreciated, and this will be an opportunity to ensure that the resultant exchanges are, as far as possible, beneficial to all concerned.
The meeting will be held in the Large Ministerial Conference Room.
I look forward to seeing you there".
Is it in order for Ministers to meet hon. Members to go through questions and arrange what should take place in the House?

Madam Speaker: Of course it is in order for Ministers and Members to meet on any issue. But I am sure that Opposition Members wish that they were sufficiently fortunate for more such letters to come their way.

Mr. John Marshall: On a point of order, Madam Speaker. Could the issue behind the ten-minute Bill that we are about to deal with be held to be sub judice? It has been reported in the press that Mr. Demetrious Panton, who was abused as a resident of an Islington council home, is suing the council and will summons its former leader, the hon. Member for Barking (Ms Hodge), to give evidence. Is it not then wrong for the hon. Lady to introduce a ten-minute Bill dealing with the banning of paedophiles? [HON. MEMBERS: "Did the hon. Gentleman give notice?"] Yes, I did.

Hon. Members: When?

Madam Speaker: Order. I will not have these arguments across the Floor of the House. I am assuming that the hon. Member for Hendon, South (Mr. Marshall) has already given notice.

Mr. Marshall: indicated assent.

Madam Speaker: The hon. Gentleman assures me that that is the case. [HON. MEMBERS: "When?"] Order. Probably at 2.30 or perhaps 3.30. I know the way in which things happen in the House; I have been here too long not to understand all that. I can assure the hon. Member for Hendon, South that had the matter been sub judice, it would not have appeared on the Order Paper today.

Mr. Barry Sheerman: On a point of order, Madam Speaker. One of the great benefits of your becoming Speaker was that you stamped on a procedure used by certain Members before that time—talking among themselves to drown out an hon. Member who was speaking. It is one of our great privileges to be heard when we speak on behalf of our constituents in this place. During last night's debate on assisted places, although my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) was not actually heckled—that might have been fairer—Conservative Members talked among themselves to drown out a speech that they dared not listen to. May I ask you, Madam Speaker, to rule with a firm rod those who would stop Members speaking or being heard in the House?

Madam Speaker: I was not, of course, in the Chair throughout the whole of yesterday's proceedings, but I am sure that my deputy dealt with the matter correctly. I have always said that in this House, Members of Parliament do not have to listen to what others say, but by jove, the Member who is speaking must be heard. There is an important distinction between the two. If hon. Members do not want to listen, they must close their ears and keep quiet, or leave the Chamber. Whoever has the Floor will be heard.

Mr. John Home Robertson: On a point of order, Madam Speaker. My point arises from the Prime Minister's final reply during Prime Minister's questions, and from the Government amendment that we shall soon debate to the Opposition motion on the sale of


married quarters. The Prime Minister said that the service chiefs support that sale. I should like guidance from you, Madam Speaker, on what protection can be given to the chiefs of staff against such liberal interpretation of what they have said. As a Member of the Defence Select Committee, I know that the chiefs of staff have said that
the benefits … outweigh the risks"—

Madam Speaker: Order. I do not defend the chiefs of staff, who are quite capable of defending themselves.

Mr. Home Robertson: rose—

Madam Speaker: Order. The hon. Gentleman has been here long enough to know that if he disagrees with what the Prime Minister or anyone else says, he has an opportunity in the forthcoming debate to get up and say so and to correct what he believes to be wrong. 'That is the way in which we proceed here—by making corrections and comments across the Floor of the House, and not by seeking to make political points through the Chair.

Protection and Education of Children

Ms Margaret Hodge: I beg to move,
That leave be given to bring in a Bill to provide for the regulation of short-notice and temporary teachers.
In bringing the Bill before the House, I seek to address vital issues that affect every child, every day, in every school. The Bill concerns the regulation of supply teachers, and the threat to children created by the gap in legislation that I have uncovered is extremely grave and potentially disastrous.
If legislation is not introduced, we shall all be guilty of failing to ensure, first, that our children are properly protected in school and, secondly, that they are being taught to the highest educational standards. A survey by the Department for Education and Employment found that one in 25 teachers in school is a supply teacher. But from the child's point of view, when heads and others who do not normally teach are discounted, it is likely that one in 15 or one in 20 classes is taught by a supply teacher—more than two classes every week for every child. We are talking about 7 per cent. of a school's budget.
Since we delegated responsibilities to schools, most head teachers come to school at 7.30 in the morning. They will not make 50 telephone calls to teachers whom they know to find a supply teacher, but will instead make one call to a private supply teacher agency. The Department's survey found that 70 per cent. of supply teachers in inner London and 42 per cent. in outer London were recruited through private supply agencies.
The agencies are here to stay. Some provide a first-class service—others do not. All work in an unregulated market where rogue operators are able to prosper. [Interruption.] Like all parents, I want to feel certain that my child is safe and is being well taught. At present, no parent can be certain. [Interruption.]
The agencies register as employment agencies, and have enjoyed substantial deregulation as part of the Government's obsessive dogma. Anybody can set up as a supply teacher agency in their front room without being vetted. I have come across Classic Services Ltd. in Porth, South Glamorgan. It was a temping agency for crane operators, but it got wind of the fact that supply teaching was a lucrative business and decided to branch out. That certainly gives a new meaning to lifting standards.
I have three serious concerns about the legal framework. First, agencies are not compelled by law to carry out essential checks on criminal records, health, qualifications and first-hand references and on whether the applicant is on the Department's list 99 of persons barred from teaching. In Manchester, the Select temping agency sent its director into a school to drum up business. The headmaster recognised the director as someone who was on the Department's list 99 of banned teachers. The director was an ex-headmaster who had been banned from teaching after being convicted of theft.
A French teacher was turned down by a reputable agency, Timeplan, because her reference said that she was
very needy ․ somewhat unstable
and concluded:
l am therefore unable to recommend her".
She was then taken on by People agency, which now calls itself Recruit, which took her on without checking her and placed her in a school in Southwark. There she behaved


inappropriately with boys, seduced two of them and falsely accused them of raping her. Although the truth came out, it was after the lives of the two lads and their families had been ruined.
Another agency took on a teacher without doing a police check that would have uncovered two convictions for indecent behaviour. He was sent to a school in Hackney—[Interruption.]

Madam Speaker: Order. I have had heard enough. [Interruption.] Order. Hon. Members who do not want to listen can leave; those who want to hear should stay and listen.

Ms Hodge: The teacher was sent to a school in Hackney and has since been convicted of abusing two children in his care. HMS Education Personnel agency sent a young supply teacher to the Lonesome first school in Mitcham. On her second day at the school, she gagged three children with sellotape after they failed to keep quiet. Those horror stories are probably the tip of an iceberg. They result from a simple failure to check.
My second concern is about standards. When agency nurses are recruited, they have to be interviewed by qualified nurses under the Nurses Agencies Act 1957. Anyone can interview a supply teacher—even I or you, Madam Speaker. Many supply teachers come from overseas and so do not have qualified teacher status. They may be competent, but their qualifications are not assessed. Permanent supply teachers from overseas have to be assessed and have to do additional training, if necessary, to obtain qualified teacher status.
Agencies cut corners to make money. I have seen an advertisement from Recruit plc with the offer, "Book 10 teacher days and get one free." An agency in Ealing offered schools £10 off a teacher if they booked before Christmas. In that climate, quality cannot be assured. It is no wonder that when Newham withdrew delegation from a primary school judged by the Office for Standards in Education to be failing, it found that half the staff were supply teachers.
My third concern springs from the way in which tax loopholes are exploited. Any copy of TNT Magazine, the free trade journal targeted at Australians and New Zealanders, contains endless ads from supply teacher agencies, among which are some from companies such as Kensington Ltd. They offer young Australian teachers off-the-shelf companies for £50 to £75 if they want headed notepaper. An agency such as Protem will find the teacher a supply job. The wages will be paid into the company and thus no tax, national insurance or VAT is payable. By the time the tax authorities catch up, the teacher has left the country.
When my researcher, masquerading as an Australian supply teacher, rang Protem, it positively encouraged her to work through an off-the-shelf company. That tax fiddle is not only outrageous but raises an another unresolved issue: who is responsible for personal and public liability insurance in such circumstances—the teacher, the school, the agency, or the local education authority? No one knows, so we are all at risk.
Our children deserve better. The issue is too big and too important to be left to the vagaries of the free market. Supply teacher agencies are a permanent feature, but that

makes it all the more important to legislate to eliminate the cowboys. The reputable agencies support my proposals, as do the representative organisations in the teaching world. Two days after the long title of my Bill appeared on the Order Paper, the Government issued a circular. I welcome that advance, but it is not enough. It does not regulate by law the private supply teachers agencies.
My Bill would: first, create a statutory framework to vet agencies before registration; secondly, insist on essential checks to protect the welfare of our children; thirdly, provide for annual unannounced inspections by Government inspectors; fourthly, ensure that supply teachers from overseas are brought into the scheme that operates for permanent overseas trained teachers, with the agencies footing the bill; fifthly, put in place a bonding system for private agencies modelled on the Association of British Travel Agents scheme for travel agents; and, sixthly, ensure that the cost of the legislation is met by the agencies.
We cannot wait for further scandals. Parliament must act promptly. My Bill deserves the support of the whole House so that we can legislate swiftly in the interests of schools, teachers and, most importantly, in the interests of all our children.

Mr. Robert G. Hughes: I oppose the Bill moved by the hon. Member for Barking (Ms Hodge). First, I should like to put it into its proper context. All hon. Members know that a ten-minute Bill at this stage in a Session cannot possibly be considered, and that it has no chance of becoming law. Therefore, all that counts for the Bill is its introduction today. It seems to be a reasonable measure, and it was very reasonably introduced by the hon. Lady. As she said, it would improve child protection, which Conservative Members support. If the measure were a serious attempt to legislate, I might well support it.
However, many hon. Members, including some Labour Members, have questions about the Bill. Our decision on whether to support it must rely on the answers to those questions. From what I have heard today, I fear that the questions that I shall pose have not yet been answered. Why is the hon. Member for Barking introducing the Bill, and why now?
As has been mentioned by hon. Members in sedentary interventions, the hon. Lady was the leader of Islington council for 10 years, until 1992. No one can now be unaware of what happened in Islington council's children's homes. She told the House that her Bill seeks
to address vital issues that affect every child, every day".
Vital issues affected children in Islington every day.
As the Evening Standard said on 23 May 1995:
An era that allowed pimps and paedophiles to flourish unchallenged at the heart of child care in Islington, corrupting and seducing vulnerable children bestowed into their care, is finally over. It has taken three and a half years"—[Interruption.]

Mr. D. N. Campbell-Savours: The hon. Gentleman is out of order.

Mr. Hughes: I do not, of course, seek to blame the hon. Member for Barking personally for that. In the context of


the Bill, however, we are entitled to question what was going on in that council at that time and to ask why she maintained, right up to the end, that the allegations were
A sensational piece of gutter journalism"—[interruption.]

Mr. Campbell-Savours: The hon. Gentleman is out of order.

Madam Speaker: Order. The hon. Member for Workington (Mr. Campbell-Savours) must hear out the hon. Member for Harrow, West (Mr. Hughes).

Mr. Hughes: The hon. Member for Barking said in her speech that agencies are not required by law to carry out checks. Islington council was required to carry out checks, but it did not. That left her successor as leader of Islington council to apologise to the Evening Standard—which revealed what was going on—as he could scarcely do otherwise.
How could that situation in Islington council have been allowed to arise in the first place? When it was exposed, why did the hon. Member for Barking seek to cover it up?

Mr. Campbell-Savours: On a point of order, Madam Speaker. The motion is very clear, but the hon. Gentleman is not speaking to it.

Madam Speaker: Order. If the hon. Member for Workington is not prepared to listen to the opposition to the Bill, I shall have to use the Standing Order against him. I will have free speech in the House. The hon. Member for Barking (Ms Hodge) introduced the Bill, and we must now hear the opposition to it.

Mr. Hughes: Why this Bill, and why now? Those are the questions prompted by the Bill. Is the Bill, with its fine-sounding ideas, an elaborate smokescreen designed to pre-empt new reports or new allegations? What further revelations are about to ooze out about Islington council?
We know that one victim is about to sue the council and to summon the hon. Member for Barking as a witness. The victim—who is a Labour party member—alleges that a series of earlier reports to Islington council were ignored, and that the council leadership should have known what was happening in its children's homes.
Those are important questions, and I am sorry that the hon. Member for Lewisham, East (Mrs. Prentice) thinks that the matter is funny. The children concerned and their parents do not think that it is funny. Those important questions have never been answered, and the Bill must be seen as a further attempt to obscure rather than to reveal the truth.
We can judge the Bill's real intentions only if we are told what the Islington leadership knew and when it knew it. After all, the first complaints were made in 1985—seven years before abuse was admitted by the leadership. What does the leadership know now, which the rest of us have yet to find out? Once those questions are fully answered, the hon. Lady will have ample opportunity in the future to come back to the House with a serious and properly timed attempt to change the law on short-notice and temporary teachers. Today is not that opportunity.
I know that some Labour Members will not support the hon. Lady in the Division Lobby and I suggest that, before supporting the Bill, all hon. Members question why they are being asked to vote for the Bill at this time and by that hon. Member.

Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—

The House divided: Ayes 161, Noes 39.

Division No. 202]
[3.54 pm


AYES


Adams, Mrs Irene
Hinchliffe, David


Ainger, Nick
Hodge, Margaret


Ainsworth, Robert (Cov'try NE)
Hogg, Norman (Cumbernauld)


Anderson, Ms Janet (Ros'dale)
Home Robertson, John


Banks, Tony (Newham NW)
Hoyle, Doug


Barnes, Harry
Hughes, Kevin (Doncaster N)


Barron, Kevin
Hughes, Robert (Aberdeen N)


Bayley, Hugh
Hughes, Simon (Southwark)


Beggs, Roy
Hutton, John


Beith, Rt Hon A J
Illsley, Eric


Bell, Stuart
Ingram, Adam


Betts, Clive
Jackson, Glenda (H'stead)


Blunkett, David
Jackson, Helen (Shef'ld, H)


Bradley, Keith
Jamieson, David


Brown, N (N'c'tle upon Tyne E)
Janner, Greville


Callaghan, Jim
Jenkins, Brian (SE Staff)


Campbell, Mrs Anne (C'bridge)
Jones, Barry (Alyn and D'side)


Campbell, Menzies (Fife NE)
Jones, Ieuan Wyn (Ynys Môn)


Campbell, Ronnie (Blyth V)
Jones, Lynne (B'ham S O)


Campbell-Savours, D N
Jones, Nigel (Cheltenham)


Chidgey, David
Jowell, Tessa


Chisholm, Malcolm
Kaufman, Rt Hon Gerald


Church, Judith
Kennedy, Jane (L'pool Br'dg'n)


Clapham, Michael
Khabra, Piara S


Clark, Dr David (South Shields)
Kilfoyle, Peter


Clwyd, Mrs Ann
Kirkwood, Archy


Coffey, Ann
Lewis, Terry


Cook, Frank (Stockton N)
Liddell, Mrs Helen


Corbyn, Jeremy
Livingstone, Ken


Cox, Tom
Llwyd, Elfyn


Cunningham, Jim (Covy SE)
Loyden, Eddie


Cunningham, Roseanna
McAllion, John


Dafis, Cynog
McFall, John


Dalyell, Tam
McKelvey, William


Davidson, Ian
Mackinlay, Andrew


Davies, Bryan (Oldham C'tral)
McLeish, Henry


Davies, Chris (L'Boro & S'worth)
MacShane, Denis


Davis, Terry (B'ham, H'dge H'I)
Madden, Max


Denham, John
Mahon, Alice


Dewar, Donald
Marek, Dr John


Dixon, Don
Martin, Michael J (Springburn)


Donohoe, Brian H
Martlew, Eric


Eagle, Ms Angela
Michie, Bill (Sheffield Heeley)


Eastham, Ken
Michie, Mrs Ray (Argyll & Bute)


Evans, John (St Helens N)
Morgan, Rhodri


Faulds. Andrew
Morley, Elliot


Flynn, Paul
Morris, Rt Hon Alfred (Wy'nshawe)


Foster, Don (Bath)
Morris, Estelle (B'ham Yardley)


Galbraith, Sam
Mowlam, Marjorie


Gapes, Mike
Mullin, Chris


Garrett, John
Murphy, Paul


George, Bruce
O'Brien, William (Normanton)


Gilbert, Rt Hon Dr John
O'Hara, Edward


Godman, Dr Norman A
Olner, Bill


Golding, Mrs Llin
Orme, Rt Hon Stanley


Gordon, Mildred
Pickthall, Colin


Graham, Thomas
Pike, Peter L


Griffiths, Nigel (Edinburgh S)
Pope, Greg


Gunnell, John
Powell, Sir Ray (Ogmore)


Hall, Mike
Prentice, Bridget (Lew'm E)


Hanson, David
Reid, Dr John


Hardy, Peter
Robertson, George (Hamilton)


Harman, Ms Harriet
Robinson, Geoffrey (Co'try NW)


Henderson, Doug
Roche, Mrs Barbara


Heppell, John
Ross, Ernie (Dundee W)


Hill, Keith (Streatham)
Ross, William (E Londonderry)






Rowlands, Ted
Thompson, Jack (Wansbeck)


Sheerman, Barry
Timms, Stephen


Sheldon, Rt Hon Robert
Tipping, Paddy


Simpson, Alan
Touhig, Don


Skinner, Dennis
Turner, Dennis


Smith, Llew (Blaenau Gwent)
Tyler, Paul


Smyth, The Reverend Martin
Walley, Joan


Spearing, Nigel
Wareing, Robert N



Wicks, Malcolm


Spellar, John
Wigley, Dafydd


Steel, Rt Hon Sir David
Williams, Rt Hon Alan (Sw'n W)


Steinberg, Gerry
Williams, Alan W (Carmarthen)


Stevenson, George
Wray, Jimmy


Strang, Dr. Gavin



Sutcliffe, Gerry
Tellers for the Ayes:


Taylor, Mrs Ann (Dewsbury)
Ms Rachel Squire and


Taylor, Matthew (Truro)
Mr. Michael Connarty.


NOES


Arnold, Jacques (Gravesham)
Key, Robert


Baker, Nicholas (North Dorset)
Martin, David


Brazier, Julian
Moate, Sir Roger


Brown, M (Brigg & Cl'thorpes)
Neubert, Sir Michael


Bruce, Ian (South Dorset)
Nicholls, Patrick


Budgen, Nicholas
Nicholson, David (Taunton)


Colvin, Michael
Pawsey, James


Cope, Rt Hon Sir John
Riddick, Graham


Duncan Smith, Iain
Smith, Tim (Beaconsfield)


Dunn, Bob
Spicer, Sir James (W Dorset)



Steen, Anthony


Dykes, Hugh
Thompson, Sir Donald (C'er V)


Emery, Rt Hon Sir Peter
Townsend, Cyril D (Bexl'yh'th)


Fry, Sir Peter
Viggers, Peter


Grant, Sir A (SW Cambs)
Walker, Bill (N Tayside)


Greenway, Harry (Ealing N)
Whitney, Ray


Hamilton, Neil (Tatton)
Winterton, Mrs Ann (Congleton)


Hordern, Rt Hon Sir Peter
Winterton, Nicholas (Macc'fld)


Hughes, Robert G (Harrow W)



Jackson, Robert (Wantage)
Tellers for the Noes:


Johnson Smith, Sir Geoffrey
Mr. David Shaw and


Kellett-Bowman, Dame Elaine
Mr. Peter Atkinson.

Question accordingly agreed to.

Bill ordered to be brought in by Ms Margaret Hodge, Mrs. Anne Campbell, Ms Tessa Jowell, Mrs. Llin Golding, Mr. David Jamieson, Mr. Gerry Steinberg, Ms Estelle Morris, Mr. Edward O'Hara, Ms Joan Walley, Ms Ann Coffey, Mr. John Garrett and Ms Janet Anderson.

PROTECTION AND EDUCATION OF CHILDREN

Ms Margaret Hodge accordingly presented a Bill to provide for the regulation of short-notice and temporary teachers: And the same was read the First time; and ordered to be read a Second time upon Tuesday 15 October and to be printed. [Bill 178.]

Opposition Day

[19TH ALLOTTED DAY]

Ministry of Defence Housing

[Relevant document: Sixth Report from the Defence Committee on the future of the Married Quarters Estate, House of Commons Paper No. 424 of Session 1995–96.]

Madam Speaker: I have selected the amendment standing in the name of the Prime Minister. I have to limit the speeches of Back Benchers to 10 minutes during the debate.

Dr. David Clark: I beg to move,
That this House notes that the Government proposes to sell all Ministry of Defence married quarters in England and Wales, including those occupied by service families as well as empty properties, to developers; further notes that this will leave service tenants dependent on a declining number of properties leased back for 25 years; notes that most of the properties can be exchanged by the developer with a neutral arbitrator, rather than the tenants or the Ministry of Defence, deciding whether or not exchanges are permitted; notes that the arbitrator will have to base his decision on set criteria which are vaguely worded, so that developers with expert legal advice will be able progressively to cream off the best estates; notes that steep rises in rents and the downward ratchet on the number of homes leased back, embodied in the proposed scheme, will progressively reduce and break up married quarter estates; notes that, especially at a time of overstretch. and poor recruiting and retention, these estates play a vital role in maintaining the morale of service families and the maintenance of the regimental system; and calls on the Government to dispose of surplus estates, to provide homes for civilian families but, before selling any estate with service tenants, to consult the tenants on the estate, to report to Parliament on the outcome of the consultation and to table an affirmative resolution in both Houses.
Today's debate is the first occasion on which hon. Members have had the opportunity to consider the sale of our armed forces' family homes, something that has caused distress and concern to service families. Government and Opposition Members have voiced their concerns, including 20 Government Members who recognise the damage of the Government's proposals, and what they will do to the morale of the armed forces and to the security of their family homes. As they are honourable men and women, we have every confidence that they will join us in the Lobby tonight.
As the Prime Minister reminded us recently, the sale
has been under consideration for a number of years".—[Official Report, 25 June 1996; Vol. 280, c. 149.]
The Secretary of State's immediate predecessor wasted £5 million on financial advisers in an abortive attempt to sell off the houses. On 28 November 1995, the present Secretary of State announced out of the blue his master plan.
That date is significant, as it was Budget day—which gives the game away. The Government have never seriously attempted to deny the fact that the sale was not concerned with the long-term interests of our service men and women: the scheme was concocted solely to raise finances for the Treasury coffers—which the House will recall is the Secretary of State's old hunting ground.
One question that comes immediately to mind is: why has this scheme succeeded in interesting the financial markets when all the others have failed? The answer is


quite simple: this scheme is extremely financially rewarding for them, at the expense of the taxpayer and the service men and women and their families. The deal is breathtaking in its short-termism. The Government hope to raise about £1.5 billion by selling 58,000 forces family homes to a single purchaser—any one of four foreign financial institutions.
The MOD then plans to rent back the houses in order to meet our forces' housing requirements. However, it will retain responsibility for repairs, maintenance and management of the estates. It has guaranteed the purchaser market-based rents on shorthold tenancies and sweeteners far in excess of the money invested. Well within a decade, the speculators will have got back their cash and more, and will also own all defence rnarried quarters and the associated land. The MOD gets to keep all the responsibility and none of the power over how the estate is run—all the bills and none of the proceeds from the estate.
They are the facts as the House and our forces' families know them to be. What devil lurks in the detail of the scheme, which the MOD has consistently refused to disclose to hon. Members or to service families? Instead of allaying the very real concerns of hon. Members on both sides of the House and of service families, the MOD's obsessive secrecy has increased them. We know where the details are, but we are not allowed to see the prospectus.
The Government's lack of confidence in the plans is so great that they have refused numerous requests to see the "Married Quarters Estate Information Memorandum". In the past three weeks, representations have been made to me by a number of parties who have a financial stake in the sell-off. As a result of those meetings, I now understand why the scheme is so attractive to them—indeed, it is widely known as the "goldmine of the decade".
Under the terms of the contract as set out in the "Married Quarters Estate Information Memorandum", the MOD will transfer 58,400 houses to the purchaser. Some 2,700 of them—the surplus estate—will be disposed of immediately by the purchaser for a quick profit. The remaining 55,700 houses—the retained estate—will be transferred to the purchaser on 999-year leases, with breaks every 25 years, and rented back by the MOD.
The MOD will have to pay a guaranteed sum to the purchaser in order to rent the properties back. The sum will run into tens of millions of pounds every year; for the first year, the figure will be roughly £112 million. Over 25 years, that annual guaranteed payment alone will amount to many times more than the £1.5 billion to be raised from the sale. Market-rate rent rises will add to the sum to be paid by the MOD, while the purchaser will enjoy the attractive bonus of receiving progressively more empty houses, with which he can do what he chooses.
The key is the 25-year period. Under the terms of the 25-year master agreement, there is a guaranteed release of further units. As well as the 2,700 surplus houses to be sold immediately by the purchaser, the MOD has promised to release further units each year. The first 695 family homes must be released within two years, with a minimum of 2,780 within five years, and a minimum of 13,360 will he released over the 25 years. That represents a quarter of the entire estate as it stands today. I can only

assume that such a drastic cut in the size of the estate reflects the Government's plans further to reduce the strength of our armed forces.

Sir Peter Hordern: The hon. Gentleman will, of course, be aware that the MOD housing estate has been the subject of Public Accounts Committee recommendations for at least 10 years. At no time during that period have there been fewer than 12,000 empty homes, and at times the total has reached 15,000. Can the hon. Gentleman really defend such a state of affairs?

Mr. Dennis Skinner: It is this Tory Government.

Sir Peter Hordern: I assure the hon. Gentleman that that was the case sone years back, into the Labour Government as well. It has been the most disgraceful and incompetent performance for many years, and the hon. Member for South Shields (Dr. Clark) seems to want to perpetuate it. I can only tell him that the figures that he is now releasing do not even begin to match the number of homes on the MOD housing estate that have remained vacant for probably a quarter of a century and more.

Dr. Clark: I cannot accept responsibility for the mismanagement of Army houses over the past 18 years. I must point out that it is possible to sell off the houses without this financial rip-off of a scheme.

Mr. Bernard Jenkin: Will the hon. Gentleman give way?

Dr. Clark: No, I must press on. Many hon. Members wish to speak, and I said that I would be as brief as I could.
Let me list one or two of the other benefits gained by the lucky purchaser. An aspect of the sale that has received considerable attention is the site exchange option, which provides the purchaser with the right to require the MOD to hand over properties in exchange for substitute sites. In a desperate attempt to placate service families, the MOD introduced a number of vaguely worded criteria that must be met by the substitute sites, relating to, for instance, travel-to-work time, suitability and standard of dwellings, security considerations and prime rates. Importantly, the criteria do not include access to employment for dependants of service personnel, which concerns service families very much.
That means that there is no guarantee for the families. The MOD has lost control of the transfer. If there is a dispute between the MOD and the purchaser, it will go to an arbitrator who will make the final decision. The military needs of this country will not be the criterion on which that decision is made. That directly contradicts the Prime Minister's assurance, given to the leader of the Labour party:
It will not mean service personnel being moved against their will."—[Official Report, 25 June 1996; Vol. 280, c. 148.]
He was wrong, and we know that he was wrong, because the Minister of State for Defence Procurement told us later that, under the terms of the contract, service families could be moved against their will, but would be forced to do so only if comparable accommodation was offered. What is comparable is a matter for debate.
Service families are used to being moved regularly. They often have to move at least once a year. I recently met a Royal Air Force widow who told me that, during her first years of service, her husband had to move eight times in two-and-a-half years. We all know of people in the military who move at least once a year. They accept that, because they know that they are being moved for military reasons. In future, however, they may be moved at the whim of property developers. The speculators will call the tune, not military demands.
The Government claim that one of the benefits of the scheme will be an influx of £100 million over five years to improve married quarters. That is because, under the proposals—

Mr. Frank Cook: Over seven years.

Dr. Clark: I stand corrected. On the basis of seven years, the Government's case is even worse.
Under the Government's proposals, the MOD will still have to pick up bills for repairs and maintenance. Last year alone, the MOD spent £126 million on repairs, and £40 million on upgrading the estate.
In a recent parliamentary answer to the hon. Member for Romsey and Waterside (Mr. Colvin), we learned that, in the past five years for which figures are available, about £198 million was gained from the sale of surplus properties. That is almost twice the amount that will be spent on reinvesting in the estate. It is fair for us to ask the Secretary of State why the moneys from sales were not used to improve the quality of housing of our service men and women. Where has the money gone? If the houses are in such a poor state of repair, what have the Secretary of State and the Government generally been doing for the past 18 years?
For 25 years, the speculators will have a guaranteed income and receipt from sales. There will be a guaranteed cash flow. The principal attraction, however, is that, after 25 years, they will gain control of the married quarters estate. The memorandum to which I have referred gives the MOD the right to retain possession of the remaining houses after 25 years unless the landlord wishes to redevelop the properties.
Late in the day, the MOD realised the shortcomings of the scheme, and introduced what it thought was a cunning scheme, in the form of a ministerial certificate related to the future operational effectiveness of the relevant establishment. Tragically, the so-called ministerial veto is virtually worthless. The legal experts retained by the would-be purchasers believe that the MOD would have the utmost difficulty in making its case in the courts. The ministerial veto is useless. After 25 years, it will be necessary to go cap in hand to the purchasers to retain the married quarters estate for military purposes.

Mr. Bill Walker: As for intervention by Ministers, I trust that the hon. Gentleman will bear it in mind that, during times of hostility, the Government take special powers and can do almost anything.

Dr. Clark: There are much easier ways of trying to safeguard and protect our service men and women, and maintain their morale, than starting to wage a war so that

the Government of the day can introduce emergency legislation. I am surprised that the hon. Gentleman, who has shown so much interest in defence matters, is prepared to betray the interests of service men and women.
Given the facts that I have laid before the House, it is no wonder that our forces' families are so deeply concerned by the Secretary of State's proposals. Put simply, they feel betrayed and deserted by the Government. The House may not want to take my word for it, but, in a press statement on 30 May, the Royal British Legion declared that Ministers
have not thought through the long term consequences of the sell-off … in short"—

Mr. Winston Churchill: Of course they have.

Dr. Clark: The hon. Gentleman says, "Of course they have," but the Royal British Legion knows a little bit about this. I suspect that, over the years, it has accumulated information, and this is its opinion. It said:
in short the proposals pose a threat to the ethos of Service life and demonstrate ignorance of Service people's real needs.
What an indictment. It is small wonder that the Legion went on to demand that the sell-off should be postponed, pending a thorough review.
Some of the most critical public statements against the proposals have come from the Army Families Federation, which declared that it was speaking out
to make the public aware of what irretrievable damage will be done to Service life if the Government sells off Service homes.
The Defence Select Committee's report came out today. It is an excellent report. It analysed the problems, in the brief time that it had at its disposal, and concluded that, until such time as detailed proposals from the prospective purchasers have been communicated to it and assessed, it will not be in a position to reach a firm conclusion on the merits of the sale. As far as the Committee was concerned, the case was "not proven".
In evidence before the Select Committee, the Army Families Federation said:
We know the Government was well aware of the concerns not only of the families but of if the three Services themselves, yet it appears to have ignored our warnings of the effect the sale will have on the morale of the Services, on recruitment, on retention and subsequently on the operational effectiveness of our Defence Force.
That strength of feeling cannot be ignored. My office has been inundated—as, I am sure, have the offices of many right hon. and hon. Members—with calls from concerned service families. Such feelings have been widespread. Indeed, they were expressed in a full-page open letter in the Evening Standard under the headline, "Mr. Portillo, you are betraying us", written by the wife of one of the our service men.
I believe that today the whole House should put our armed forces and their families first. It is easy to praise them from these Benches for their dedication and the sacrifice they make for this country. We all do it. But words are cheap. Words are not enough. The armed forces must know that they are valued and treated fairly by the House.
I hope that I have clearly demonstrated that this ill-thought-out plan makes no long-term economic sense, and will cost the British taxpayer severely in the future.


It will continue to cause untold uncertainty to our service families, who rightly feel badly betrayed. Sometimes, the House has got to do something. Today is one of those occasions.

The Secretary of State for Defence (Mr. Michael Portillo): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'supports the Government in its determination to improve the quality and management of service housing; notes that the proposed sale of the married quarters estate in England and Wales will release £100 million of new funding to upgrade married quarters throughout the United Kingdom, and enable the Ministry of Defence to dispose more efficiently of surplus properties; notes that the sale will have no bearing on the charges service personnel pay for their quarters; recognises that the interests of the services and service families have been properly protected; and accepts the judgment of the Government and the Chiefs of Staff that the sale offers the right basis for real improvements in service housing which are long overdue.'.
Nothing is more important to me than the welfare of our armed forces and their families. The Government must provide proper homes in which our service families can live, and take care of their families. That is not just a matter of bricks and mortar. Families provide each other with support and understanding, and it matters to service families to be secure and to be surrounded by friends.
I take this opportunity to pay a whole-hearted tribute to service families and wives. They do not often receive the public recognition that is their due. In times of turbulence and great activity, still today they keep the home fires burning.
It is vital for the soldier, sailor or airman on active service to know that the family is decently housed and properly looked after. Given Britain's present high levels of military activity, I thank the service wives and families for their patience, courage and stoicism. They are an absolutely integral part of service life.

Mr. A. J. Beith: rose—

Mr. Portillo: I want to get a little further.
A number of my hon Friends have expressed concern about our proposal to find a new owner for the married quarters. I am not surprised that it has been Conservatives who have raised the matter as it is the Conservative party that cares about defence and knows the issues that are of interest to service families.
I welcome the attention that the subject has received. It has helped me to improve the scheme that I am proposing. I welcome the representations that we have had from the organisations of service wives and I also welcome the report from the Select Committee on Defence. The matter has aroused anxieties among service families who have had to cope with change and who fear that the proposal might bring more changes. I am pleased to set out today why the policy is a good one and why people should not be anxious.
It is clearly good for morale and for peace of mind if service men and women who are posted are accompanied by their families. Our duty to provide married quarters for their families will continue indefinitely and we will meet the demand for them, where they are needed and when they are needed. But, in future, I propose that the Ministry should do so by renting, not by owning.
The Ministry has not been good at owning houses. In too many cases, their quality has fallen below the standard that service families have a right to expect and, legitimately, service families—like the rest of our community—have rising expectations. We now need to refurbish more homes more quickly. The sale of married quarters will provide the Ministry with an extra £100 million, which it would not otherwise have had, to spend on extra refurbishment. Over five years or so, we shall raise the quality of the houses we occupy to grade one condition.
If we do not proceed with the sale, I cannot imagine how, with all the pressures on public finances, we could hope to complete that programme of improvements. We would condemn a large number of service families to go on living in poor conditions.
The Ministry will do better and service families will benefit by our giving up ownership. Owning so many houses has its cost in that capital—taxpayers' money—is tied up unnecessarily and unproductively. Through the sale, that money can be released for better purposes, including meeting the many other demands for public sector capital investment.

Several hon. Members: rose—

Mr. Portillo: I am surrounded by hon. Members who would like to intervene. I think that the hon. Member for Stockton, North (Mr. Cook) was first on his feet.

Mr. Frank Cook: The Secretary of State said that the money could be released for better purposes. Would he care to enlighten the House as to the specific purposes that he has in mind?

Mr. Portillo: I gave an example straight away, but I think that the hon. Gentleman was on his feet before I had finished the sentence. I referred to other demands for public sector capital investment. This money is not tied up productively at the moment; it can be put to better use. I now give way to my hon. Friend the Member for Davyhulme (Mr. Churchill).

Mr. Churchill: My right hon. Friend spoke about the costs of ownership of armed forces' houses, but how far have the Government truly considered the cost of the proposed lease-back scheme? My right hon. Friend will be aware that over the past five years, comparative rents in the private sector have been increasing three times as fast as the cost of living. What will be the impact on the public finances at the five-year intervals when the service rents are ratcheted up to market levels? What guarantee can he offer that any increased cost will not, at the end of the day, be sought by the Treasury from the defence vote rather than being borne by the Treasury, which properly should bear it, given that it will be receiving 15 times as much benefit from this deal as will the armed forces?

Mr. Portillo: My hon. Friend made many points. I do not want to detain the House too long. I do not recognise my hon. Friend's figures for the rise in rents of shorthold tenancies. My figures show that rents have risen by 14 per cent. between 1990 and 1996. My understanding with the Treasury is that the defence budget will not be left worse off through making rental payments. Indeed, we will be better off because the Treasury will meet the rental payments. The Ministry of Defence can give up the


hidden costs that I have mentioned and exchange the uncertainties of ownership for a more certain stream of rental payments. What is more, as I have just said, the Ministry will be compensated by the Treasury for the rents paid.
We have been bad owners in another way. We have a large number of empty houses, to which my right hon. Friend the Member for Horsham (Sir P. Hordern) referred. Today, there are 12,000 of them in England and Wales alone. We have to pay to secure and maintain those houses out of the defence budget, and we are rightly criticised for not releasing houses in which civilian families could live.

Mr. John Home Robertson: Why not sell the empty houses?

Mr. Portillo: It has not been for want of trying to sell them. Some of them are difficult to sell, so they remain on our hands, empty and expensive. Once there is a new owner, the Ministry can release surplus properties to him. Instead of having to search for a buyer ourselves, we will just need to give six months notice of leaving a site. From that moment, the property becomes the new owner's responsibility and the defence budget is relieved of the cost.
The MOD alone will determine what houses will be given up—not the new owner, not anyone else—and it will be our clear policy to release them in discrete groups that do not break up the integrity of the service patch. There is absolutely no right for the new owner to cherry-pick or infill. We will be able to improve in that respect on recent experience. I recognise that, in some instances, the pressure on service housing managers to sell surplus property may have led them to release the most sellable houses, even if it risked breaching the integrity of the patch. My hon. Friend the Member for Portsmouth, South (Mr. Martin) has made that point to me. In future, we will be free to release only the properties that we do not need and are not central to a service community. There will be no more mixing of civilian families among service homes. Communities will be kept intact to maintain the security and mutual support of the patch.

Mr. David Nicholson: On how many occasions in recent years have the Opposition decided to use one of their Supply days or half a Supply day to discuss bad management of MOD housing? On the medium and long-term siting of service and married quarters, will my right hon. Friend confirm that the arrangements will not prevent the moving of service quarters to parts of the country that are less under pressure from civil housing developments and that the geographical arrangements are not absolutely set in concrete?

Mr. Portillo: We will require the houses where the Ministry of Defence needs to do its work. We will need houses where our people have to be. Those locations may well change—certainly over 25 years and even more so over 200 years. The arrangements give us the flexibility to acquire houses where we need them and to give up easily houses where we no longer need them. It seems much more sensible to achieve that by renting than by

owning. I do not recall any occasion on which the Opposition used their Supply days for the purpose to which my hon. Friend referred.

Mr. Beith: I assure the Minister that I have asked many questions about the management of RAF housing. He may be confident about the arrangements, but if a service man is on an unaccompanied tour in, for example, the Falklands islands, and receives a letter from home saying that the family home is in question because it is one of those that may be exchanged as part of the development deal, the kind of picture that the Minister wanted to portray earlier of giving service men confidence will not be that portrayed at all. Service men overseas will be extremely worried when the news comes to them.

Mr. Portillo: As the right hon. Gentleman may be able to imagine, I shall come to that issue later, and I shall address his point then.

Several hon. Members: rose—

Mr. Portillo: This is a short debate and I am therefore under pressure, but I realise that hon. Members want me to give way.

Sir Teddy Taylor: As my right hon. Friend the Secretary of State appears to have said something very significant and reassuring, will he give us an assurance on the integrity of the site that there will be no question of purchasers being able to put their tenants in a military area? As he is well aware, many of us are very concerned about the integrity of service areas. Will he further give an indication about the security of houses in military establishments? Will they be treated differently? They are terribly important matters. The Secretary of State has raised a significant point. It would be reassuring for it to be included in the contract.

Mr. Portillo: My hon. Friend can be entirely reassured. The new owner would have absolutely no right to put civilian tenants into military communities. As I said a moment ago, the properties that we give up are entirely a matter for the Ministry of Defence. They have nothing whatever to do with the new owner. The change affects the title to the properties. It does not affect their maintenance, security or any other aspect. I shall explain the special arrangements for the 11,000 properties that are behind the wire. Apart from that, we have no intention of giving up our responsibilities, nor do the civilian police have any intention of giving up their responsibility for security in married quarters simply because the title to the houses may have changed hands.

Several hon. Members: rose—

Mr. Portillo: I shall give way to my hon. Friend, but the House will recognise that I am constrained by time.

Sir Michael Grylls: Does my right hon. Friend agree that the freehold of those properties is better off in the hands of professional property managers whose sole business is looking after property and who understand it, rather than in the hands of the Ministry of Defence, and that the resulting standard should be very much higher? He mentioned the £100


million to be spent on improving the properties. Will he ensure that the work is carried out by professional people rather than by the Ministry of Defence? Perhaps he should consult the new owners to make sure that we achieve good value for that £100 million.

Mr. Portillo: Most of the improvements to our housing are carried out by private contractors. That has always been the case. No doubt it will continue in future. We have not done well in maintenance in the past. We now have a new organisation in charge of maintenance—the Defence Housing Executive. I shall explain the improvements that we have made in that respect.

Mr. Nick Ainger: rose—

Mr. Portillo: I shall give way to the hon. Gentleman, who has been attempting to intervene, but then I must make substantial progress.

Mr. Ainger: The Secretary of State has told the House about the ease of disposal of MOD properties either to the single buyer or afterwards—if the purchaser wishes to dispose of them. Has every property that he has mentioned—all 58,000 plus—been cleared through the Crichel Down regulations? Many of them must be covered by those regulations. He is well aware of the problems at Trecwn, just outside my constituency, where properties that were declared surplus at the beginning of 1994 still have not been disposed of because of the Crichel Down regulations. Will he assure the House that each property that he says can be easily disposed of can be sold?

Mr. Portillo: I have engaged excellent legal advisers. I am not aware of any problem in that respect and I have great confidence in the Government's title to all the properties that are being disposed of.

Dr. David Clark: My hon. Friend the Member for Pembroke (Mr. Ainger) has made an interesting point. Although I heard what the Secretary of State said, may I ask him to assure the House that the principles that guided the Crichel Down ruling will apply to the freehold sale of the land currently held by the MOD which is involved in the memorandum? Will the Government adhere to those principles?

Mr. Portillo: Ministers are anxious to explain every point. I shall ensure that that point is covered fully by my hon. Friend the Minister of State for Defence Procurement in his reply to the debate.
The Ministry will be the tenant of the new owner and a most exceptional one at that. The Government will retain responsibility for the maintenance of the homes. We shall be renting more than 50,000 properties and we are the most reliable tenant in the country. That enables us to rent at a discount of more than 50 per cent., guaranteed for the first 25 years. At the end of that period, the rents will be renegotiated, taking account of the size of our lettings, our responsibility for the maintenance and our reliability as a tenant. I cannot imagine that any other tenant will be as attractive to the owner and I have no doubt that we shall again be able to secure an excellent deal.
As the Select Committee said, we shall need to do better on maintenance. The chief of the Defence Housing Executive is a professional in housing management and

he will expect his staff too to obtain the proper qualifications. As now, those who occupy the houses will pay their accommodation charges to the Ministry, not to the new owner. What they pay will be set by the independent Armed Forces Pay Review Body as it is now. The review body will take no account of the rent paid by the MOD to the owner.
Service families will continue to enjoy a subsidy that will push their rents well below market levels. That subsidy is deserved because service families move house frequently—each time they are posted. They do not have the choices or the rights enjoyed by civilian tenants, such as security of tenure or the right to buy. Although the pay review body recently increased rents, it increased pay by much more so as to leave service men clearly better off overall.

Sir Michael Shersby: By how much?

Mr. Portillo: In respect of a corporal, for example, rents were raised by £22 a month between April 1995 and December 1996 and pay rose by £66 a month. The occupiers of married quarters will have no dealings with the new owner. They will see few differences from the sale except the better programme of home improvements.
There are two special features to the sale regarding site exchange and redevelopment which have raised concerns. I shall set out the safeguards and propose some changes. Neither proposal applies to service homes behind the wire, and that cuts out 11,000 houses straight away.
Provided that whoever buys the houses initially keeps them and does not sell them on, the owner may propose exchanging the houses that we rent from him for a new site. If so, what he offers must be comparable or better. There are detailed contractual safeguards to ensure that.
We make that comparison by reference to five broad categories backed up by 21 detailed criteria. That ensures that we shall consider a broad range of factors: the distance between the houses and the military facility, the distance to leisure facilities, schools and churches and, of course, the quality of the houses—right down to room sizes.

Sir Jim Spicer: On comparability, my right hon. Friend will know that a large number of service families accept the need for additional expenditure to improve the properties. In respect of the exchange of properties—for example, if an estate is closed down and sold off—will there be a total guarantee of comparability so that service men and their families are not moved into houses that are inferior in any way to those that will have been improved out of the £100 million that my right hon. Friend mentioned?

Mr. Portillo: Comparability will apply to houses as they are at the time of the proposed exchange. It will be measured by reference to the five broad criteria and the 21 more specific criteria that I set out just a moment ago. In response to suggestions from my hon. Friends, I have already added an extra provision that job opportunities for families should also be taken into account.
That list of criteria makes it unlikely that many such exchanges will occur. It is a demanding list, it is tightly drawn up and it is binding. If for any reason, however, we cannot agree with the owner about whether our criteria are met, arbitration—based on the rules that we have set—provides a quick and inexpensive way to resolve the issue.
The second special feature allows the owner to propose, after 25 years, that a whole site should be returned to him for redevelopment. At that stage—who knows—that may be the best option from our point of view. The houses will be 25 years older than they are now. The armed forces may no longer wish to be in that location and it may be best to obtain new accommodation.
If, however, we need those houses for operational reasons, we have the power to veto redevelopment. The Secretary of State of the day can rule it out by issuing a certificate. That is the ultimate safeguard. I simply do not recognise the legal advice quoted by the Opposition spokesman as I think it has no basis in fact.

Sir Michael Shersby: At paragraph 49 of its report, the Select Committee drew attention to the concern of service families that a site exchange might involve a change of school for their children which could affect children who might be in the middle of a GCSE course, for example. Can my right hon. Friend assure me that, in considering the scheme, he has at the forefront of his mind the quality of education for service families?

Mr. Portillo: Yes, and I shall make a specific point on that issue in a moment.

Mr. Menzies Campbell: May I ask the Secretary of State about arbitration on comparability? If there is arbitration, it will take place only because there is no agreement between the parties. Even if the criteria on which the arbiter is to make his decision are those laid down by the Ministry of Defence, it is at least possible that he will find against the Ministry, in which case any guarantee offered will be only as strong as the Ministry's case at arbitration.

Mr. Portillo: The hon. and learned Gentleman is being rather petty. We have a clear contract. The criteria are clear, numerous and specific, and have been drawn up by very good lawyers. There are contractual obligations. Nevertheless, of course it is possible that we may have a dispute. If we do, either we can take it to law, with all the expense and unpleasantness that that involves, or we can have the simpler system of appointing an arbiter. I believe that the second is the simpler and better way.
The hon. and learned Gentleman must recognise that over any contract there may be a dispute; no one can guarantee that that will not happen. So what we want is a good way of resolving such disputes. [Interruption.] I seem to have carried the hon. and learned Gentleman with me, and I am pleased about that.

Mr. James Couchman: My right hon. Friend has said that the houses will be of comparable or better quality, that schools and employment factors will be taken into account, and that an exchange would not require people to travel greater distances. Will he reassure the House that distance will be measured in terms of travelling time to and from the establishment to which the houses are linked?
While my right hon. Friend is answering that question, will he also assure the House that if an exchange were made, the estate given up would not be fragmented into a number of much smaller units?

Mr. Portillo: There is no question of fragmentation. We would measure distance according to how long it took people to arrive at their destination—that is, the military establishment where they work.

Several hon. Members: rose—

Mr. Portillo: I want to press on to the end of my speech now, because if I do not it will be an abuse of the time of the House.
As I said, I have valued the suggestions that I have received for improvements. I have already acted on a number, some of which were important to the chiefs of staff and some of which were made to me through Members of Parliament. Today I want to act on three more.
The first two relate to the option for site exchange—the proposal that we might swap one site for another. The Army Families Federation has asked us to include among the criteria for comparing one site with another not only the closeness of schools to the new site but the quality of the schools near the site. Education is of huge importance to parents, and I shall happily add that criterion to the list.
Secondly, there have been calls for consultation with those who might have to move. Such moves will be rare. And of course, moves to new accommodation in mid-posting already occur today, as we improve our use of the houses that we own. Moreover, it must be recognised that an exchange may take a long time to organise, and many families may have moved on anyway between the time of the proposal and the time of the change.
None the less, all that having been said, it is certainly reasonable to ask the occupiers of the day their views on how the two estates compare, judged by the criteria. I undertake that we shall consult them. We shall wish to accept a new site only if it is as good as what we have, or better—and we shall check our view with the views of the service people who have been living on the original site.
The consultation cannot be a veto, but it can be effective because it will be taken into account by the Government in reaching their view on how the estates compare. In the event of an arbitration, the occupiers' views will be given to the arbitrator and he will have to weigh them as a factor that he is obliged to consider. That is an important change. I have made it because I believe that it meets a point in the minds of several of my hon. Friends, and because it can be done without cutting across the chain of command.
The third change is this. If after 25 years we receive any proposal to redevelop a whole site, we shall stipulate that the Government must be given a minimum of four years' notice, as well as two years' free rent, so that we can be sure to have the alternative houses ready in good time.

Mr. Nicholas Winterton: Will my right hon. Friend give way?

Mr. Portillo: I was heading for home—but yes.

Mr. Winterton: My right hon. Friend will know that I am not a soft touch. Despite approaches and persuasions, I have not yet removed my name from the early-day


motion. But will my right hon. Friend accept it from me that, having been in close personal touch with him and with my hon. Friends the Minister of State for Defence Procurement and the Minister of State for the Armed Forces, and having had several meetings, I fully accept the new proposals and I am happy to support the Government?

Mr. Portillo: My hon. Friend's happiness is as nothing compared with my own. I told my hon. Friends that I would listen carefully to what was proposed. M y hon. Friend the Member for Macclesfield (Mr. Winterton) made a specific proposal, and I was happy to accommodate that; it was the second proposal that I announced today.

Mr. Quentin Davies: May I also thank my right hon. Friend, and my hon. Friend the Minister of State for Defence Procurement, for having listened carefully to representations made by my hon. Friends and myself and, most importantly of all, to representations made by representatives of the service families.
There is no doubt that the three additional measures that my right hon. Friend has just announced change the balance of the whole package considerably. I think that there was an implicit assurance in what he has just said, but will he give an explicit assurance that when the Government consider proposals for site exchanges, they will interpret and take account of the results of the consultation exercise in accordance with the criteria that he set out at the beginning of his speech—that is, that the Government's first priority in the matter is to ensure that the reasonable interests of service families are defended, and that the Conservative party will always take its stand on that subject?

Mr. Portillo: Yes, indeed. I am grateful to my hon. Friend. I assure him that every word of my speech has been considered, and that all the words should be taken together.

Mr. David Martin: As my right hon. Friend knows, the Army and the Royal Air Force have consultative bodies—the Army Families Federation and the Association of RAF Wives—to represent them when matters concerning families arise. Will he give sympathetic consideration to setting up a naval services families association, or something similar?

Mr. Portillo: I have certainly benefited greatly from my contacts with the Army Families Federation and with the Association of RAF Wives. I have not come across any organisation representing Royal Navy wives. 'There is none, on a national basis, but if there were one I. should happily meet its representatives. Whether such an organisation should be set up is not properly a question for me, but I should certainly be happy to recognise and deal with one if it came into existence.

Mr. John McWilliam: rose—

Sir Patrick Cormack: rose—

Mr. Portillo: No, I think I must finish now, because otherwise I shall have taken too long.
We have devised a scheme that brings benefit to—

Sir Patrick Cormack: Will my right hon. Friend give way?

Mr. Portillo: indicated assent.

Sir Patrick Cormack: I am grateful to my right hon. Friend for giving way.

Mr. McWilliam: On a point of order, Mr. Deputy Speaker. Is the Minister not displaying grave discourtesy to the House by giving way only to his hon. Friends?

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): That is not a point of order for me. The Minister is responsible for his own speech, and for choosing whom to give way to.

Sir Patrick Cormack: May I ask my right hon. Friend to address himself to one important point before he finishes? I understand that several organisations have expressed an interest in the purchase of the estate. Will he make it plain to the House that he will give strong preference to a British purchaser?

Mr. Portillo: I am pleased to say that, so far as I am aware, all the bidders have a British element to them. None of them is exclusively British.
Does the hon. Member for Blaydon (Mr. McWilliam), who was so upset, want to intervene?

Mr. McWilliam: Would the Minister care to enlighten the House on how large a British element there is in these bids?

Mr. Portillo: No, because although details of the bidders have been published, it is not for me to say who they are.
We have devised a scheme that brings benefits to our armed forces and their families and, for that reason, I have received the support of the chiefs of staff, for which I am extremely grateful. The sale underlines some lessons that we have learnt in 17 years of Conservative Government. For the Government to provide a service, they do not have to own that service. Indeed, time and again we have seen that Government ownership has led to inefficiency and poor service.
I have no doubt that we can provide service families with the homes they need by renting them. Indeed, we can do it better than now. We will free our housing managers from the distractions of designing, building and trying to sell houses, and we will focus them on retaining and acquiring houses of good quality that are fit for service families.
The Government have a clear political philosophy. We look to a dynamic private sector to provide most of our needs. That is not a matter of dogma, but is because the private sector does most things better and can help us to improve the quality of services. We believe that the Government should not own things where it is unnecessary, and that we should reduce public sector borrowing where we can. It is worth remembering that


people pay taxes in order to pay the interest on the Government's debt. That money could be better spent on other things.
The policy that I have described today improves housing for the services, but it also cuts public sector borrowing and releases money. The fact that it does so is a point in its favour, not a point against.
Over the coming years, I expect housing standards in our country to go on rising, and service families will want to share in that general improvement. As they see civilian standards rise, service families too will want something better. If we are to recruit and retain enough good people, we will have to provide more high-quality housing than we have in the past, and keep it in better condition.
I am committed to improving the quality of life for service families, and this scheme gives me the chance to make rapid progress towards that goal. I believe in the values, ethos and traditions of service life. If I believed that this sale would undermine them in any way, I would be fighting it—not proposing it.

Mr. Deputy Speaker: I must remind the House that Madam Speaker has placed a 10-minute limit on speeches for the rest of the debate.

Mr. Bruce George: The Secretary of State's introduction was a syrupy eulogy of the service wives who had been browbeaten into surrender. Then we saw the ritualistically self-defensive party of defence yet again being holed below the water line. The bugles sounding surrender are amusing and deafening, and those who did not surrender two weeks ago have done so now. The family silver is gone—now the Government have got down to getting rid of the bricks and mortar.
I have been a member of the Defence Select Committee since it began in 1979. In the 200 or so reports that we have produced, the Committee has borne witness to endless foul-ups that have become routine. I have seen many stupidities—indeed, I have seen them in superabundance—and I have seen party advantage elevated above public interest. It is unusual for all three to coalesce into one measure, as they have in this measure.
The Government are proposing to transfer the ownership of the married quarters estate in England and Wales to the private sector in a series of long leases, and then rent back the accommodation by paying a guaranteed annual sum. Was that the only way to do it? Of course not. The Ministry of Defence has been the owner of housing for two centuries—not a very good owner, I might add. But the Government have been in charge for 17 years—long enough to put housing on a proper footing. It is an appalling indictment of the way in which they managed the housing estate that they must flog it off at the earliest opportunity available to the Secretary of State.
If the management were inadequate, surely the Government should have given the organisation that they have just set up—the Defence Housing Executive—time to do its job. It is qualified to do so, and the Government should have allowed it to manage the housing estate effectively. If the Government wanted reform, why did they not proceed with the announcement that they made a few years ago to set up a new non-profit organisation to

take care of the ownership and management of the married quarters? Why did they not follow their 1993 manifesto commitment to set up a
non profit-distributing housing trust"?
The Defence Select Committee said:
We are dismayed that an apparently arcane disagreement between the Treasury and MoD on the classification for statistical purposes of the proposed new Housing Trust should have obstructed a course of action embarked on some time ago. There is no evidence to suggest that the private sector would have been less willing to invest in the originally proposed trust than it will be in the recently proposed private company: merely that the transaction would be reflected as an increased PSBR figure rather than as a privatisation".
The report continued by stating that there was
no significant public or parliamentary opposition to what the MOD had tried to do
after the 1993 manifesto commitment, and added:
We are not convinced that the only way to reduce the number of empty quarters and fund required improvements is by selling the bulk of the estate.
The report noted that the MOD had already sold nearly 7,000 married quarters. If the Government want to get rid of the excess, they can carry on doing what they have done—selling the estates if it is necessary to do so.

Sir Teddy Taylor: As a lot of people outside will be watching, listening to and reading this debate, would it not be helpful if the hon. Gentleman, or perhaps his Front-Bench colleagues, would make clear that, under a Labour Government, there would be no question of military housing being sold as a unit to the private sector?

Mr. George: I have no authority to give that assurance, but I trust that my Front-Bench colleagues will do so.
Why was it necessary to sell the houses? Were they all elderly, or stock that should be got rid of? No. The Government clearly had other intentions. The Select Committee report said:
We note that the fact that the majority of the estate is in generally good condition was confirmed by an independent stock condition survey commissioned by MD to assist prospective purchasers.
So the idea that the houses are being sold off because they are dilapidated is nonsense.
Some £100 million given to the new authority set up by the Government would largely solve the problem. Why go through the pantomime of selling all the properties—potentially to the Nomura bank of Japan—when MOD Ministers should go to the Treasury and say, "We want £100 million to upgrade the accommodation because we owe it to our service men and their families"? The Minister of State told the Select Committee that
we do not just go to the Treasury and get £100 million out of them
but they should try to do so.
Everyone knows that the real motive is not to improve MOD housing, but to improve the Tories' election prospects. The British service man has made many sacrifices, but rarely for such a base and undeserving group of people. Families who are to be turfed out of their properties, who may have some headbangers located next door or across the road and whose service ethos is shot through will remember who imposed the scheme upon them.
Why is this scheme being carried out? It is bananas. "Surely," we are told, "the MOD will gain." But it will not. Although the MOD is to dispose of the assets,


the Treasury will get £1.5 billion. The MOD will retain the responsibility for managing, providing social services and maintaining the security of the estate, but it is getting nothing out of it. The gainers will be the Tory party and the property speculators. The MOD will not get the dosh, because it is going to the Treasury.
The Government are the short-termers, whose eyes can rise only as far as the next election. They do not know or care what will happen in five or 20 years. It is "tax cuts now, stupid"—that is the cry. The morale of service men, already low, will plummet even further. This is being done unnecessarily.
The MOD argues that the chiefs of staff endorse its action, but chiefs of staff who have endorsed a deterioration of defence expenditure from 5 to 2.6 per cent. of gross domestic product are unlikely to worry too much about 60,000 houses. Those who argue that this action has been endorsed by the Army Families Federation should note its statement that it was reluctantly withdrawing from public opposition. That is hardly a ringing endorsement.

Mr. Portillo: I think that I heard the hon. Gentleman, who is a member of the Defence Select Committee, being pretty insulting to the chiefs of staff. As the record of the debate will be read, I wanted to give him an opportunity to reconsider what he has said.

Mr. George: I thank the right hon. Gentleman for giving me the opportunity to reconsider but I shall move on to the identity of the buyers. That is secret. I was not present when the Minister of State for Defence Procurement reluctantly divulged to the Committee who they were. I read details in the newspapers. It is all hush-hush. I received a video from one buyer today so perhaps it is not really so hush-hush.
I am not xenophobic, but I do not like the idea of housing for which the MOD is responsible being bought by the Nomura bank. If the Japanese win contracts, many people will be insulted. I asked the Secretary of State whether the Japanese would be able to demand name changes on the housing estates, perhaps removing references to Montgomery or the Chindits. I was told that that was over the top but we must not forget what happened in County hall, whose new Japanese owners refused to permit British service men to honour their war dead until public pressure forced them to do otherwise.
Our report was the best that could have been produced in the circumstances. We could have produced a much better one if we had had adequate information. Our conclusion used the words
We have sought to be satisfied".
We did not say, "We have been satisfied".
This action is being taken at the direction of the Treasury and, perhaps, of Smith square. It is being done for the wrong motives. The Government, those who supinely follow them, and those who will be dragooned into following them will reap the whirlwind. We have ample information about the threats against hon. Members who were seen to be opposing the Government. I hope that the Government will relent because I do not want service men to be inconvenienced and their family homes sold, potentially to foreign owners.

Mr. Deputy Speaker: Order.

Mr. Michael Colvin: I pay tribute to the hon. Member for Walsall, South (Mr. George) for his speech and for his contribution to the Defence Select Committee, on which he has served for so long. On defence matters, he knows what he is talking about.
My intervention will be brief because although the Defence Select Committee, which I chair, set out our preliminary conclusions on the sale of the married quarters estate in our sixth report of this Session, which was published this morning, it is, as the hon. Member for Walsall, South said, inconclusive. I apologise to the House for its interim nature. It is incomplete because much of the information that we would require to finalise it is commercially confidential: hence all the stars in some of the evidence-taking sessions. They do not refer to expletives deleted but to confidential information.
We felt a duty to report in advance of the debate on the Floor of the House, which was bound to take place before the House rose for the summer recess. I pay tribute to our staff, to our special adviser and to the Committee, who have enabled us to meet the deadline and to have the report available for this debate. We felt that there would be such a debate, either because the other place would have approved the amendment to the Housing Bill or because the Opposition would use a Supply day for it.
The debate in the other place was interesting. Most of the speeches opposed the Government's scheme for selling married quarters until there had been more consultation and a resolution of both Houses in favour of it. However, most of the votes were in favour of rejecting that proposition and letting the Government proceed as they planned. Surprise, surprise.

Mr. McWilliam: I attended that debate and I have never seen the other place more crowded. They must have brought them out of the woodwork.

Mr. Colvin: The House will have noted that with interest and a certain amount of agreement.
The proposed sale of the married quarters estate has sparked off a lively debate in the House and outside—and quite unnecessarily. If the Government had handled the operation with more care, many of the anxieties of service men and women and their families would never have arisen. The House can agree on that.
The married quarters estate has been badly managed and maintained. There is an urgent need for better management and an enormous injection of funds to upgrade properties. Further, there is no good defence reason for the MOD to own between £1 billion and £2 billion in bricks and mortar. The money to upgrade the properties was not going to come from the shrinking defence budget; it had to come from the Treasury. As we know, there are Treasury pressures on all spending Departments and the defence budget is most certainly not immune to those threats from the Treasury.
We hope that the recently established Defence Housing Executive may improve management and maintenance—provided that it recruits the right people and is properly funded on an on-going basis. We also note that more than 2,700 quarters are surplus to requirements and 20 per cent. of the total stock of 60,000 dwellings is empty. In defence terms, in today's uncertain world, the turbulence of


service life and the pressures on service men and women—and, therefore, on their families—will increase. The quality of life necessary for recruitment and retention will be more difficult to achieve. We can also agree that the cohesion and ethos of the married quarters estate—the so-called patch—is a vital part of the welfare, and therefore the morale, of service men and women.
The charges for accommodation for married quarters had fallen behind the market and the Armed Forces Pay Review Body had taken overdue but necessary action to bring them more into line with the charges for council housing, housing association dwellings and the private sector generally. We can also agree—and even Ministers might acknowledge this—that the Government have made a rod for their own back by their appalling timing in the setting up of the Defence Housing Executive, the introduction of new, increased accommodation charges through the Armed Forces Pay Review Body and by the announcement of the current proposal on Budget day, which made the insistence of my right hon. Friend the Secretary of State that this was not a Treasury-led operation rather incredible.
As our inquiry continues, the Committee will need to be satisfied, first, that the concept of the sale is in the public interest; secondly, that the method of sale is appropriate; and, thirdly, that the needs and expectations of service families are properly protected and that defence interests are being respected. We already feel that the Defence Housing Executive needs to be strengthened if it is to do its job properly. It must be assured of an adequate allocation of cash each year from the proceeds of sales to guarantee the proper maintenance and repair of all MOD housing.
The £100 million mentioned by Ministers works out at approximately £2,000 per dwelling. Bearing in mind that we have been told that upgrading is likely to include new kitchens, double glazing, new window frames and decorations, I cannot believe that £2,000 per dwelling is anything like enough. That money will be made available over five years and the House needs to be reassured that money will continue to be made available for that purpose beyond that period direct from the Treasury, rather than from the defence budget.

Mr. Tim Smith: As my hon. Friend's report says that the majority of the stock has been well maintained and is in generally good condition, surely the money will be directed to the 19 per cent. of properties that are in poor condition?

Mr. Colvin: I thank my hon. Friend for that intervention. That is true but there is bound to be an on-going demand. The money that has been promised will not go far to maintain and upgrade properties. I am sure that if his wife asked him for a new kitchen, she would not get one for £2,000.
The House and service families need to be reassured that the sale will have little or no immediate effect on service families' housing other than to improve it, and that the safeguards recently offered by the Ministry of Defence in the site exchange option scheme and the absence of any link between housing charges and the sale will be accepted universally.

Mr. Nicholas Winterton: My hon. Friend heard the Secretary of State announce three specific proposals.

I think that the proposals are excellent. Before my hon. Friend finishes his speech, will he comment on those proposals?

Mr. Colvin: For a ghastly moment I thought that my hon. Friend had changed his mind or had second thoughts. I am glad that he used that opportunity only to endorse what he has already said, and I agree with him.
Whereas rents paid by service families will be fixed by the Armed Forces Pay Review Body, I remind the House that rents paid in future by the Ministry of Defence to the purchaser of the married quarters estate is, we have been told, likely to be calculated on an assured shorthold tenancy basis. If that is so, have Ministers modified their projections of the rent that they will have to pay to the purchaser in the medium term? The House needs to be assured that if the rent that the MOD pays the purchaser is increased, the Treasury will fund that amount for at least 25 years.
Any reader of our report will see that it raises as many questions as it answers. Until such time as the prospective purchasers' detailed proposals have been made public and assessed, we will not be in a position to reach a firm conclusion on the merits of the sale. Our Committee intends to re-examine this issue when all the necessary information is available.
Our Committee was very impressed by the quality of the evidence presented to us. Undoubtedly the star of our sessions was Mrs. Cherry Milne, the chairman of the Army Families Federation. But I should also say that, considering the sticky wicket on which he was batting, my hon. Friend the Minister of State for Defence Procurement carried his bat very well. I am pleased that he is in the Chamber today for a second innings.
We must ensure that our service men and women and their families have the housing that they deserve, because we owe it to them. As they comprise the best forces in the world, they should have the best housing.

Mr. Menzies Campbell: If the speech of the Secretary of State had been set to music, certainly the early parts of it would have owed rather a lot to Vaughan Williams and to William Walton. As he came towards the end of his remarks, however, it was rather more reminiscent of the childhood ditty "10 Green Bottles". One after another, those who had so bravely held out before suddenly found themselves converted to his position, because of the nature of the concessions that he was able to make. If concessions on the proposals were necessary even in the course of this debate, they have been hardly indicative of the type of intellectual rigour that one would be entitled to expect—[Interruption.]
The hon. Member for Macclesfield (Mr. Winterton) makes a lot of noise. He is not always listened to, and he must ask himself why he has been particularly successful on this occasion. It is less than a week since he was talking about matters being obscene and wholly unwarranted—relating to the vital consideration of car mileage. Possibly he will be more successful when he adopts rather less dramatic language, and perhaps he will bear that in mind in future.
We would respect Ministers rather more if they were to come clean about the motive for this sale, because to argue that the motive is to improve conditions in married


quarters is disingenuous, and even offensive to intelligence. To argue that is to confuse objectives with consequences. Clearly, the motive is to reduce Government borrowing in the short term. As an objective taken on its own, it is highly desirable, but the question that we must ask ourselves is whether the price, in this case, is worth paying.
What has been the first cost of the proposal? It has been the peace of mind of service families. It is no use saying now, "We, the Government, will have to make a better case," because the damage has been done. It is no use saying now, "They do not understand the nature of the proposals." Whose fault is it that service families do not understand the nature of the proposals, particularly as the proposals—as we have just seen—change daily?
It is no use saying now, "We shall embark on an exercise of consultation." A very extensive consultation exercise was embarked on when the issue of homosexuality in the armed services was under consideration, and rightly so. Why was it that something that goes right to the heart and ethos of the armed services, such as the proposal to sell married quarters, was not subject in advance to that degree of consultation?
The proposal's complications are a clear sign of its weaknesses. The Select Committee on Defence was unable to reach a conclusion—as the hon. Member for Romsey and Waterside (Mr. Colvin), the Committee's Chairman, said—because of the absence of detailed proposals from prospective purchasers. That is bad enough for the Committee, but it is much worse for the families, who, in the absence of such information, are not themselves able to reach conclusions about the merits and advisability—or otherwise—of the proposals.
When I intervened on the Secretary of State, he described me as "petty". I shall not allow him an opportunity to withdraw that observation, as he allowed my fellow Defence Committee member, the hon. Member for Walsall, South (Mr. George), an opportunity to withdraw what he had to say about the service chiefs, but I shall repeat the point that I made to the Secretary of State: if the issue, ultimately, is arbitration, the Government cannot guarantee anything other than the strength of the case that they will make to the arbiter. There cannot be "guarantees"—in the strict sense of that word, or in the sense in which most service families understand it.
There is a financial price to be paid by the Ministry of Defence. Do not take my word for that, but take the word of The Times of 11 July 1996, which referred to
the Government's short-term interests storing up a mess of trouble for the future
and stated that, over 25 years, the Government, in return for £1.6 billion now, might pay out more than £10 billion. That should certainly focus our minds on whether this proposal is worth it.
If a shortfall arises between the rental paid by service families to the Ministry of Defence and that which is required to be paid by the Government to the purchaser, where will the money for that shortfall be found? It will be found in the defence budget. Any undertaking or "guarantee" to a contrary effect is simply meaningless.
The proposal embraces the proposition that £100 million will be made available over five to seven years for improvements to the housing stock, to be

administered by the Defence Housing Executive. The executive already receives £40 million per year for that purpose. After five or seven years, however, what then? What benefit will service families receive from the sale then? It is not as if the £100 million will be a recurring figure; it is a once-and-for-all figure. Once it has been paid and spent, no doubt the Defence Housing Executive will be back to the same level of financial support for improvement that it currently enjoys.

Mr. Frank Cook: I should like to explore the justification provided by the £100 million, as it seems to be the raison d'etre for the entire set of proposals. The fact is that 12,000 properties might be available. I do not know whether the hon. and learned Gentleman feels that £10,000 a unit would currently be an excessive price for a house on the market, but does he realise that 12,000 times £10,000 is £120 million, which would enable the Government to take the £100 million and to put the £20 million excess where it is probably going in any event—into Tory party funds?

Mr. Campbell: I am not sure that I am in accord with the final part of the hon. Gentleman's proposal, but I certainly believe that he mentioned something interesting in his intervention. It anticipates a point that I had planned to make. There are 2,700 houses for immediate release. If he is right and they would command a figure of £10,000 each—which is a pretty low figure—that would release £27 million in the first year. However, if the figure were £40,000, for example, £108 million would be released, which is almost exactly the sum that will be made available over five to seven years to the Defence Housing Executive.
The Government have not properly explored the possibility of the sale of surplus houses and thereby the release of funds for the purpose of improvement and, at the same time, the issue of whether to use private management companies to quell their anxiety about quality of management. I do not come to this debate with a doctrinal bias in one direction or another. If the Government could demonstrate that using private management expertise would be a better way to manage the defence housing estate, I would support that. However, this proposal demonstrates their willingness to consider not the best means of managing and improving stock but the best means of raising £1.5 billion. That is why there are so many defects in the scheme.
One of the principal defects is that the purchaser need take virtually no risk. Indeed, the scheme is so risk free that I am thinking of forming a private company to make an offer.

Mr. George: You would not get the contract; you are British.

Mr. Campbell: I am sure that I could call on some international support to assist me.
Purchasers can buy those properties and get a market rent for them with a review every five years. Furthermore, they will receive a guaranteed annual payment from the Government with a guaranteed annual release of properties. They also have the prospect each year of realising the development potential of the houses released to them. Can one conceive of a better scheme for


purchasers? It is virtually risk free and, as a consequence, the Ministry of Defence will obtain an inadequate reward for the contract. The scheme is essentially wrong, but, if the Government want to adopt it, they should look for a much larger sum than £1.5 billion or £1.6 billion, because the nature of the contract that they will enter into is so favourable for the purchaser.
Two features of this tawdry proposal cause me particular offence. The first is the veiled threat that, if it does not go through, the defence budget will suffer directly. If that is so—there has been the usual heavy briefing of the standard Sunday newspapers—it is an eloquent demonstration that the proposal is about raising cash, not about raising standards of accommodation. The second is the assertion that the proposal has become a battleground for the supporters of the rival right-wing contenders for the leadership of the Conservative party.

Mr. Bowen Wells(Lord Commissioner to the Treasury): Rubbish.

Mr. Campbell: The hon. Gentleman says rubbish. I see that the right hon. Member for South Thanet (Mr. Aitken) has joined us. I heard him make that point about a fortnight ago. He is a man of considerable intelligence and judgment; I cannot imagine that he would have made that point if he did not think that there was substance in it.
Those two features unquestionably ensure that the conventional and customary expressions of support for the armed services and their families, which characterise debates of this kind and form part of the speeches of Conservative Members, have a distinctly hollow ring on this occasion.
The Government survived—perhaps that is an unfair way to put it; they triumphed—on this issue in another place. The trading rooms of the merchant banks must have been deserted. Indeed, the pheasant-rearing pens of the estates of England must have gone without proper supervision, because people who had been a long time deciding to vote came and voted. The issue for the House this evening is whether it is willing to try to stop this proposal in its tracks. Originally, 67 honourable and, in this context, gallant Members signed the early-day motion, the terms of which are precisely reproduced in the motion before the House. That number has decreased to 20. All that is necessary for the proposal to be killed off is for those brave boys to join the Opposition parties in supporting the motion. By their votes we shall know them.

Mr. Julian Brazier: It is no secret that I have been and am profoundly opposed to the structure of this scheme, although it would be churlish not to acknowledge that my right hon. Friend the Secretary of State has announced some significant concessions today. They are concessions of substance, not just presentation.
The media are currently dominated by pictures of the unhappy situation in Northern Ireland. It is common for hon. Members on both sides of the House to pay tribute to the behaviour of the security forces. The armed forces are deployed much further afield, not least in the difficult and potentially dangerous conflict in Bosnia. It is easy for us to forget that our armed forces have been subject to an

unparalleled—except in the immediate aftermath of war—series of changes. They have had "Options for Change"; a mass of regimental amalgamations; "Front-line First"; and, in the past decade, a halving of the fraction of gross domestic product allocated to defence. Obviously, some of those changes were necessary because of the end of the cold war, but as the list goes on and on—each change was to be the last—so we risk undermining the ethos at the heart of our armed forces.
Baroness Park said in another place that our armed forces were "becoming punch drunk". I remind my hon. Friends of the remarks of my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) last week about the threat of another set of defence cuts in the coming Budget. This debate is a timely reminder of the special duty that we owe not just to our armed forces but to their families. I feel that particularly strongly because I represent a garrison city. When I was canvassing for the 1992 general election, a little boy told me that that morning his father had been shot in the leg on the streets of Northern Ireland. The special duty that extends to our armed forces and their families is not just because they serve us in often dangerous and difficult conflicts but because they cannot speak for themselves. That gives us, as Members of Parliament, a special duty towards them.
As this matter has been discussed in the public arena—it has at last come to Parliament—the message that has come across again and again is that the scheme has been misunderstood. That is not altogether surprising because, as my hon. Friend the Member for Romsey and Waterside and other members of the Select Committee said, the details have been slow in coming forth. Initially, members of the armed forces knew about what was happening only from a terse signal that went out through the channels of command one way, and from a letter from my right hon. Friend the Secretary of State.
I received a letter from the honorary colonel of a Territorial Army unit about the fate of the regular members of that unit in the build-up to this scheme, with the repackaging of housing that will take place as a result in the next few weeks. It said:
The Commanding Officer, half way through his tour, is being compelled to move to Biggin Hill to a quarter that just does not compare with one he lives in at present. This does at least allow his boy to remain on at the same school. The RSM has already been moved to Coulsdon to a very indifferent quarter. For a Warrant Officer the posting as RSM should be the peak of his career—this has been spoilt by this move. The Training Major is being short toured, partially to avoid a move of his family from Caterham.
People have always been moved, often frequently, between tours of duty, but it is new for large numbers of service personnel to be moved about in the middle of postings and, as in this case, dispersed to meet pressures for sales.
Built into the measure is a formula for the release of 600 houses a year—not automatically every year, but it must average 600 a year on a cumulative basis—which means that the process will continue, and will add to the turbulence experienced by armed forces personnel.
The programme of site exchanges has caused considerable worry in the armed forces. We have heard some worthwhile movement on that today, and the two concessions that my right hon. Friend the Secretary of State announced will make a significant difference and go some way towards meeting the representations by the Army Families Federation.
I remain, however, profoundly concerned about what happens at the 25-year mark. When we consider the idea of exercising a ministerial veto via a certificate, we should bear in mind the fact that, at the 25-year mark, the developers are not required to provide alternative accommodation, although they will now have to give four years' notice. The certificates would present a problem if the developers wanted to take a large number of their sites, as all the sites would come up together.
There are good reasons for thinking that the developers may well wish to take a large number of the sites. A high proportion of them are in southern England, in districts where there is development pressure. Many are close to training areas, which are not only vital for the armed forces but extremely attractive to wealthy civilian families, who want to live near genuinely unspoilt countryside.
Ministers might be confronted by the prospect of trying to issue large numbers of ministerial certificates of operational necessity at the same time. It is unrealistic to believe that, in a judicial review, they could get away with doing so when Ministers have testified that that procedure would be used only "very rarely". We are building up a serious problem in a generation's time—one that worries me as someone who was commissioned 24 and a half years ago into Her Majesty's forces.
We are also driving a wedge into the defence budget, as the ratchet increases every five years much faster than inflation. My hon. Friend the Member for Romsey and Waterside explained that, so I will not cover the same ground.
I am especially worried about the way in which the scheme will work in parallel with the findings of the Bett review, part of which has been welcomed in the interim statement from the MOD. The Bett review's vision is of far fewer of our future service families living on these married quarter estates and far more in owner-occupied accommodation. In practice, the officers will move off and the special situation of patch life, especially precious in the Army, where there are so many anxious young wives of those from other ranks who look to their officers' and senior non-commissioned officers' wives for leadership, will be progressively eroded. I shall be interested to hear what my hon. Friend the Minister says about progress on the Bett review.
I want to end where I came in. Considering the difficult and demanding job that our armed forces are doing abroad, and given that a higher proportion of them are involved on operation and tours than at any time since 1945, except briefly during the Gulf war—a higher proportion even than during the Korean war—I believe that this scheme does not meet their wishes.
I said at the beginning that it would be churlish not to take account of the fact that my right hon. Friend the Secretary of State has genuinely tried to listen. I came to this debate determined to vote against the Government—something that I have done on only one previous issue, and that was nine years ago. Because my right hon. Friend has gone quite some way towards meeting the most immediate problems in the scheme—the short-term ones—while still leaving in the scheme the serious problems that are much further in the future, I intend to leave open the possibility of abstaining.
I shall listen hard indeed to my hon. Friend the Minister, and I shall listen especially hard to what he says on two subjects—the policy on accompanied service on

which the Bett review was so unhelpful, and the way in which the release of 600 houses a year is likely to impact on those people who are in the middle of tours.

Mr. John Home Robertson: I have no direct constituency interest in the matter before the House because there are no service married quarters in my constituency and, even if there were, they would be not be part of this deal as my constituency is in Scotland. I want to raise a point arising from that and from what the Secretary of State said at the outset.
The Secretary of State said in ringing terms that the sell-off was the only way to secure good management of married quarters. He seemed to despair at the prospect of the Defence Housing Executive managing the married quarters estate efficiently. What kind of a vote of confidence is that for his newly appointed Defence Housing Executive, and where does that leave the 10,000 married quarters in Scotland and Northern Ireland, which will continue to be controlled by, and remain the responsibility of, the Ministry of Defence? He cannot have it both ways. He seemed to be saying that his Department was incapable of running the estate properly—but those married quarters in Scotland and Ireland will remain under his control.
I do not accept the Secretary of State's counsel of despair. I am convinced that it should be possible for the Defence Housing Executive to manage the estate properly. I am confident that it will be able to do so in Scotland and Northern Ireland, and that it should be given an opportunity to do so in England and Wales.
My interest in the debate arises from information gleaned as a member of the Defence Select Committee and from my visits to Army units under the armed forces parliamentary scheme, in which I am taking part this year. I have had the privilege of visiting units throughout England in recent months and I look forward to seeing more.
I have to tell the Secretary of State and his ministerial colleagues that service men and women of all ranks are very worried about what is proposed. Some of them are suffering from a serious depression in morale, if I may put it that way, as a result of a range of problems. The Secretary of State knows about the problems of overstretch, turbulence—call it what you will. Fewer and fewer service men are expected to take on more and more duties, which means that life is difficult for our armed forces at present.
I am left in no doubt from my conversations with service men and service women and their families in recent months that uncertainty about the future of their homes is pushing some of those people far too far. They are worried about rents. I heard what the Secretary of State said earlier, but I am afraid that the recent increase in rents is an alarming foretaste of what could follow. I heard his assurances, but there is no way of being certain that in future the Treasury will not put the Ministry of Defence under pressure to balance that account by increasing rents, and he should know that better than most, as a former Treasury Minister.
People are worried about the risk of being moved even more than they are at present from one quarter to another, as other hon. Members have said. People are worried about the integrity of the service housing patch. Those points were mentioned repeatedly.
The Secretary of State gave a welter of assurances and concessions. We have heard them in recent weeks; we heard them again tonight. They can be summed up as the Secretary of State saying, "Trust me; it will be all right on the night"—or in 25 years or whenever. "As long as I can get the money into the Treasury coffers by the end of this year, it will be okay as time goes on."
The Secretary of State showed a touching confidence in legal arbitration and did not dwell on the costs that are likely to be incurred when we get embroiled in such legal arbitration between a future Ministry of Defence and lawyers acting on behalf of the new owners, if the sale goes ahead. He cannot get away with that. The real problem, however, is that the assurances are largely meaningless. The package is unworkable and unenforceable. With the best will in the world, the assurances that the Secretary of State gave tonight and in recent weeks cannot be fulfilled in future.
The Secretary of State should bear in mind the fact that he will not even be here next year. Someone else will inherit this fundamentally flawed package. It is unworkable now and it will never become any more workable.
The Secretary of State must not be allowed to get away with creating a bed of nails for service families. He will get brownie points from his colleagues, because he will get some ready cash into the Treasury this year, but service families and taxpayers will be left with a whole range of problems in the future. The House should not let him do this. He is being fundamentally dishonest.
I refer to a more serious point concerning dishonesty. The Government's amendment refers to support for the package from the chiefs of staff. I have trawled the papers that have been made available to the Defence Select Committee on the issue, and the nearest thing that I can find to a reassurance is a letter in which one of the chiefs of staff—I shall not embarrass him by naming him—says that the benefits outweigh the risks. That is the sort of endorsement that one might expect to get on one's driving licence if one was caught driving too fast—but it is not a ringing endorsement of the package. It is dishonest of the Government to hide behind the chiefs of staff in that way. This is a bad political decision—it is bad for service families and taxpayers—and the House should not allow the Government to get away with it.

Mr. Cyril D. Townsend: I welcome the courteous tone of my right hon. Friend the Secretary of State, his comments on service families and his genuine concessions, particularly about consulting the families concerned—that is a real concession. Some people in the Tea Room say that early-day motions do not have any impact on the parliamentary scene. Over the past few weeks, I have seen Ministers and Whips scurry round my colleagues with suggestions polite and not so polite, and my impression is that early-day motions have a significant say in the workings of the Palace of Westminster.
I have listened to my right hon. Friend, and I have tried to work out how I shall vote this evening. I thought that he was busy trying to make a bad scheme better. He did not convince me that he had come up with a "Top of the Pops" scheme that I should admire and rush round my constituency supporting. I admit that I came in on the

issue a little late in the day. I met a senior general at a social function and said, "There is a row on this issue. Does it matter?" For a good five minutes, he pointed out that in his command it was a serious issue, that morale was low and that he hoped that the scheme would be withdrawn in the House of Commons before too long.
I listened to an excellent debate in the other place the other day. Lady Park spoke with great vigour, eloquence and distinction. I was in the armed forces for 10 years in the Light Infantry battalion, and I pricked up my ears when I heard the speech of Lord Bramell—a field marshal; a Green Jacket; a man who has worked his way through the defence field and a man who understands the thinking in the Ministry of Defence.
I differ from the Front Bench in that I have not yet heard sufficient argument for the overthrow of the married quarters system, as we have known it in the United Kingdom and in Germany since the war. In most other countries, the armed forces own the quarters—they are organised and run by the Government. We should not be ashamed of the fact that we have owned the married quarters for many years, and we have to be careful about taking privatisation too far.
I was a little cool when privatisation was first suggested, and I have voted on every privatisation measure. I had some reservations about selling off nursing homes—an issue that is not entirely relevant to what we are discussing tonight. On the whole, privatisation has been a great success. However, I hope that we are not now going to embark on a programme of petty privatisation—looking for small bits and pieces of the national estate to privatise, and I am not just thinking of Greenwich. This is a clever wheeze from the Treasury—it has been around for four years, and many of my right hon. Friend's predecessors had it put in their in-trays and decided not to take it up.
We have to hear good arguments about why the whole system of married quarters, as we know it, needs to be changed in this way. I am concerned that if the change proceeds—perhaps even now there is a paper sitting in the Treasury—there will be plans for the privatisation of the sports facilities of the barracks and the bases: the football pitches, the running tracks, the swimming pools and the pistol ranges. Treasury officials could put up a case similar to that on the married quarters; they could say that if we sell off all these bits and pieces, we shall raise a significant sum at a time when the Treasury desperately needs it. I am not unsympathetic to the Treasury's point of view.
A base or a barracks has a certain integrity. I am not happy at the thought of the commanding officer's house at the Special Air Services in Hereford, or a rather more salubrious house belonging to the colonel of a Guards battalion in Windsor, or the house of the colonel of the Marine Command in Plymouth, being sold off to one of these grand international conglomerates. I do not think that our constituents will say that selling off married quarters to these large, foreign industrial concerns is a wonderful political move.
We have to use our judgment in this regard. I am not convinced that over the past 25 years we have had a copper-bottomed scheme. I do not doubt that the Ministers have the best of intentions, but I do not believe that the Ministry of Defence and whoever it may be in five, 10 or 15 years' time will be able to impose the controls


on the developers that we have been hearing about tonight. The developers are in there because they want to cherry-pick—of course they want the commanding officers' quarters, and it would be naive of us to think that they did not. They want the site in the constituency of my hon. Friend the Member for Portsmouth, South (Mr. Martin), which overlooks the Solent, because it is a desirable property. There will be judicial reviews, and we shall move into a messy area. The Ministry of Defence, with the best will in the world, will not be able to hold to the firm intentions that were honourably stated from the Front Bench tonight.
One of the things that the Whips love to say as they scurry around is, "Of course you have to support this—we need £1.6 billion." That is not a serious argument. As Back Benchers, we are responsible for controlling the Executive, particularly in the financial sphere. We are allowed to comment in public and to have views on which particular scheme should raise money for the Treasury—for example, whether the poll tax should raise money for local government. It is a cheapjack argument to be told that we must vote for this at all costs, because that large and important sum can be funded only in that particular way.
Another argument went roughly like this: we do not believe that the Ministry of Defence, when the moment comes, will choose to put money into quarters rather than into weapons systems—the Ministry of Defence is so incompetent that it has not realised that it has to allocate time and resources to welfare as well as weapons. I do not believe that for a moment—it is a basic function of the Ministry of Defence; it is a basic subject of command. Any general who says, "Spend more money on weapons and ignore morale," is no good and ought to be sacked.
I am enormously conscious of the chopping and changing that have hit our armed forces in recent years. Two years ago, I did not support the Government when the defence White Paper came before the House because I believed that we had cut too far and without justification. We should pay particular attention to the service families on whom we rely so much at this time and who are suffering directly from the problems of overstretch. It is not that long ago when naive people spoke about the British Army pulling out almost totally from Northern Ireland.
If we are honest about our duty to those individuals, we should ask my right hon. Friend the Secretary of State to withdraw his scheme tonight pending further consultation. After careful deliberation, I remain committed to the wording of the early-day motion. I believe that it has already done a good job of work, and there is more mileage in it yet.

Mr. Frank Cook: I shall not detain the House long. It is a pleasure to follow the measured and lucid speech by the hon. Member for Bexleyheath (Mr. Townsend). I commend him for the courage that he displayed in making his final commitment.
It is easy to get lost in the detail about billions of pounds here, hundreds of millions there and so many thousand houses. I do not suppose that we shall win the argument tonight, but I wish to clarify the situation so that people in the big wide world will understand the nonsense that is being proposed.
It is rather like my owning a house in south London that is worth about £150,000. I do not own such a property, but, if I did, I could put it on the market and

allow someone to buy it for about £100,000. In order to persuade someone to purchase my £150,000 property for £100,000, I would tell him, "Look, I shall spend £6,000 immediately doing it up and making it top grade. Having done that, I shall keep it in top condition for the next 25 years."

Mr. Mike Hall: "And I will pay you."

Mr. Cook: Exactly. On top of that, I would promise to pay market rent on the property until I ceased to use it—however long that might be. I suggest that if everyone operated in that way, we would be in lunatic asylums. It does not make sense in the case of my single property or in the case of the Government's many properties. We have talked about the need to house the troops properly. No one suggests that we should not do that: that is how it should be.
What will happen in the future? What will happen when we withdraw from Germany, Cyprus, Hong Kong and the Falkland Islands, as we are bound to do? Will we be in the same position then as is Russia today? Will service men and women return to this country to find that they have nowhere to live? Will they be housed in tented accommodation, regardless of the climate? That is a distinct possibility if we go down this route. Can we expect a developer, who is responsible for the properties and who fills the houses with civilian tenants over time, to change his pattern of recruiting tenants in order to make way for troops who are returning to their homeland? It simply does not make sense.
We have been asked to believe that the defence chiefs of staff accept the proposals—an acceptance that my hon. Friend the Member for South Shields (Dr. Clark) called into question. "Acceptance" is not the word used by the ranks of the defence force that I have encountered—I refer not to corporals, senior non-commissioned officers or middle-ranking commissioned men, but to those of the rank of air commodore, lieutenant-colonel and commander in the Royal Navy. They are all seriously concerned about the matter.
We are told that service families will be mollified. That is so ironic, it is almost insulting. When some service families first made their protestations, questions were asked about whether they were qualified to represent the views of all families throughout the forces. I considered that an insult at the time, but it is even more insulting for the Government to turn round now and say that they will accept some form of consultation. The right time for consultation was long before the proposals were put on the table.
If this Government had been in power in 1940, we need not have relied on the Spitfires, the Hurricanes or the men and women who kept them aloft so splendidly in defence of this country. We could simply have waited for the German Chancellor to sail across the channel with a bag of reichsmarks and then trotted happily to the bank. The proposals before the House tonight have little to do with improving estate management and much more to do with the logic of the pawnshop.

Mr. Jonathan Aitken: This debate was billed in advance as a great clash of the gladiators over an issue of high principle. There were predictions that it would end in a photo-finish in the Division Lobbies tonight. However, the debate is coming to an end not with a bang, but a whimper. In fact, there are two whimpers—the whimper of a Back-Bench revolt fizzling out, and the whimper of an Opposition who are retreating with their tail between their legs because their transparently opportunistic ploy in the form of a Supply day motion has failed. It deserves to fail ignominiously.
It is right that the motion should fail, first and foremost, because my right hon. Friend the Secretary of State for Defence made an excellent speech. He announced some important new concessions and clarifications that meet virtually all the concerns about the scheme that were expressed sensibly during constructive discussions in recent weeks.
Secondly, the motion should fail because the facts of the scheme speak for themselves. The message is clear: the glory of the scheme is that it is in the interests of both the service men and the taxpayers. [HON. MEMBERS: "Rubbish."] Opposition Members have tried to conjure up all manner of hobgoblins, foul fiends and spirits from the vasty deep to justify their opportunistic Supply day motion. In the end, their grievances boil down to two highly fallible claims: first, that the scheme is somehow a threat to what is known in the jargon as the "service man's patch"; and, secondly, that it is a rotten deal financially.
I shall meet both those doubtful claims head on. The Secretary of State said—far more eloquently than I can—that the integrity of the married quarters patch is guaranteed and will be protected. Under the scheme, the purchaser will have no power to break up the patch, to move non-service families on to the patch, to slice up the patch, or to cherry-pick portions of it. Phantom arguments have been conjured up about problem families being moved into defence housing or security being lifted. They are complete and utter codswallop—old Canterbury tales. Nevertheless, we have dealt with those claims very efficiently.
The purchaser of the married quarters estate will not be able to call the shots as to which houses will be retained for service occupation and which will be released from the patch. That management function is exercised today by the Defence Housing Executive, and it will continue to exercise it into the future. It is subject to the overriding ministerial veto that maintains the paramountcy of service housing in order to meet operational requirements. There is no threat to the patch.
I turn now to the claim that the scheme is a bad deal financially. That does not stand up to serious examination. I shall speak personally for a moment. During my short life as a bird of passage in the ministerial aviary, I occupied two perches and I adopted two viewpoints—both of which are relevant to this debate.
First, for two years I had the honour to serve as a Minister of State for Defence, and, in that capacity, I believed it my duty to safeguard the interests of British service men. It was crystal clear that the defence married quarters estate had suffered over the years from under-investment, inadequate management and poor maintenance.
Time and again, on visits to military bases, it was possible to see those detrimental policies reflected in physically poor conditions such as leaking roofs, crumbling walls and far too many empty houses. The huge plus of this scheme is the introduction of much better professional management: over the next few years, £100 million will be spent on improving all those poor-quality houses to grade 1 accommodation standard. That is an enormous bonus, as service men on the estates will recognise when the scheme is explained to them properly.
From the viewpoint of a Minister of State—or, indeed, a Defence Minister of any kind—I can see that the scheme is in the best interests of service men. It is no surprise that the chiefs of staff, whose integrity should not be stupidly questioned, have come out clearly and said, "Let the service voice be heard. Let it be said, plainly and clearly, that this scheme has been supported down the line by the chiefs of staff, because it is in the best interests of service men."

Mr. Home Robertson: The right hon. Gentleman says that the service chiefs of staff have supported the proposal unequivocally. Has he any evidence to support that?

Mr. Aitken: I refer the hon. Gentleman to the exact words of Field Marshal Sir Peter Inge, Chief of the Defence Staff, who expressed such support in clear and explicit language only a few days ago.
As for the financial deal, let me correct—on an historical basis—a misstatement of fact by, I think, the hon. and learned Member for Fife, North-East (Mr. Campbell), which has run through the argument in recent weeks. I refer to the claim that this is a Treasury-led scheme—

Mr. Menzies Campbell: Will the right hon. Gentleman give way?

Mr. Aitken: No, I will not. I am still replying to the point made by the hon. and learned Gentleman.
I can speak with some authority and some historical knowledge, because I was—as it were—officer of the watch when the scheme went to the Treasury. I assure the House that the revelation that it would save the public sector borrowing requirement more than £1 billion came as a pleasant surprise to the Treasury. It was a surprise because the scheme had originally been service-led inside the MOD, for the housing reasons that I have mentioned, and had not featured as a possible cost-saving measure in the "Front Line First" or defence costs study arguments.

Ms Rachel Squire: Will the right hon. Gentleman give way?

Mr. Aitken: No. Time is short.

Mr. Menzies Campbell: Will the right hon. Gentleman give way?

Mr. Aitken: No. As I have said, time is short.
Let me repeat that, not having heard that it was a possible cost-saving measure, the Treasury was pleasantly surprised to learn that, in its new form, the scheme would save the PSBR more than £1 billion. That was a double whammyrcontribution>: good news for both service men and taxpayers.
That brings me back to the Opposition. We are debating a classic old Labour Opposition day motion. The Opposition defence spokesman, the hon. Member for South Shields (Dr. Clark), presented himself as the service man's friend, wearing his heart and CND badge on his sleeve, and proclaiming that he was speaking up for service men; but his weapons in the debate have been "Down with better housing for service men" and "Down with a reduction of £1.5 billion in the PSBR". That is not old Labour; it is neanderthal Labour. It might be called aboriginal Labour, for the weapons that the Opposition have picked for today's debate have turned out to be boomerangs. The motion deserves to be defeated resoundingly.

Mr. David Jamieson: I am very glad to have been called. I apologise to the Secretary of State and my hon. Friend the Member for South Shields (Dr. Clark) for not having been present for their opening speeches.
The right hon. Member for South Thanet (Mr. Aitken) said that we were debating an old Labour motion. I remind him that the motion with which the House was originally presented was tabled by 65 Conservative Members, including a number of those who sat near him nodding as he spoke. This is not a Labour motion but an old Conservative motion, tabled by Members of Parliament who wanted to do what would be best for service families.
Hon. Members on both sides of the House who table early-day motions have a distant ambition that they will be discussed at an early day, and we must often contain our disappointment at the delay in discussion of the matters involved. I hope that the 65 Conservative Members who signed the early-day motion will now congratulate my hon. Friends on bringing the early day forward so conveniently, enabling us to discuss a matter that was so important to them only three weeks ago. The question before the House today is not whether Conservative Members will vote for a Labour motion, but whether they will vote for their own motion.
My constituency contains many service families, and Plymouth contains more than 3,000 service quarters. I use the word "quarters", because those who occupy the accommodation have no choice about the location. They are not ordinary tenants. They cannot choose their furniture, or even what they plant in the garden. They are allocated their quarters for the period during which they, or their husbands, are serving in the armed forces.
As has been said, those families need to feel secure, especially when the menfolk are working away. This deal is bad for service families and disastrous for the taxpayer, and in isolated pockets of the country, which nevertheless constitute significant areas, it will be bad for small home owners.
Without doubt, to make the deal work, service families will be encouraged to be shunted around from one place to another. The developers will eventually want to maximise profits: they will want to clear out lucrative estates that could easily be sold, and put them on the market. The scheme cannot operate in any other way. As the Minister and the Secretary of State know, there is no question of operating mixed estates, with service and civilian families living side by side. Indeed, the Minister of State for

Defence Procurement has made that point. Service families will be cleared out of estates so that they can be sold as cheaply as possible.
There is a clear relationship between the sell-off and rent increases in the coming years. Earlier this year, in a written answer to my hon. Friend the Member for Warley, West (Mr. Spellar), the Secretary of State revealed that rents for service married quarters would increase by between 10 and 25 per cent. this year. In the same answer, he said that rents would continue to increase over the next few years until they reached the same level as civilian rents for surrounding houses.

Mr. Portillo: indicated dissent.

Mr. Jamieson: The Secretary of State shakes his head; I hope that, when he winds up, he will tell us just what those rent levels will be. I calculate that they will be two or three times as high as they are now.
The Secretary of State will also know that, earlier this year, when I asked whether service families would be given any recompense for the extra rent that they would pay, the Minister of State for the Armed Forces replied:
We do not propose to introduce any additional financial assistance to compensate for the rises in service accommodation charges."—[Official Report, 18 March 1996; Vol. 274, c. 68.]
This is a tax on service families. They will pay the price of the sell-off, so that the Conservative party can use tax cuts as a weapon in the election.
That was confirmed by the hon. Member for Bexleyheath (Mr. Townsend), who denied what had been said by the Minister. The Minister said that the Government's proposal was intended to provide better homes for service families, but the hon. Member for Bexleyheath—who presumably listens to his Whips—told us that the Whips were going around saying that they needed the money for tax cuts for the election. That is the truth. Service families will pay for the folly of this sell-off in years to come: they will pay for the extra money that is needed to lease back the properties. They will pay the £100 million a year that will be needed in the first few years as a tax on their income.
Each year, in my city of Plymouth, the MOD declares up to 80 service families homeless by evicting them at the end of their tour of duty. Will homes be available for men and women who have served their country but no longer have a home because the Ministry of Defence has evicted them? Will those homes continue to be available? Will developers take on the responsibility to put a roof over those people's heads? The MOD is not taking on the responsibility, and I see no prospect of a private developer doing so.
We hear that there are about 20,000 empty homes. Why does the Secretary of State not do what the Conservative party set out in its 1992 election manifesto? It was one of the few matters on which the Labour and Conservative parties agreed. The Conservative party stated that it would make these homes available for social housing—for rent—to get people off housing waiting lists.

The Minister of State for Defence Procurement (Mr. James Arbuthnot): I shall read the 1992 Conservative manifesto to the hon. Gentleman, because he has got it wrong. The relevant passage reads:
We will set up a task force—headed by an independent chairman—to help bring empty government residential properties back into use. These will either be sold or let on short term leases to those in housing needs.
We are selling them.

Mr. Jamieson: May I assist the Minister by reading on? The Conservative party manifesto claims that the party's policy
will enable us to house more people on the waiting list".
That is what the Conservative party stated in its manifesto. The Government are now denying that claim by the action that they propose to take.

Mr. Arbuthnot: Will the hon. Gentleman give way?

Mr. Jamieson: I will not give way again to the Minister. He will be able to take up my argument when he responds to the debate on behalf of the Government. He will have the opportunity to deny what is set out in the Tory party's election manifesto.
The Minister knows that, in my constituency, 147 houses have recently been released to a housing association. The lets have gone to Plymouth city council so as to do what the Conservative party stated in its manifesto—to take people off the housing waiting list and put decent roofs over their heads. The Minister will be aware that 50 per cent. of those homes are for former service families so that they can have some security once they have left the services, or because they have been evicted by the MOD.
The Government's proposals are bad for service families. The price of the sell-off will be met over many years by a tax on those families' homes and incomes. The proposals are bad news for local housing markets, because in certain areas a flood of cheap houses will suddenly come on to the market. House prices will be depressed, and that will have a special impact on home owners who are in negative equity.
The Minister knows that that has happened already in some areas. It has happened, for example, at RAF Sculthorpe and RAF Wittering, where groups of houses were sold. House prices in those localities suddenly plummeted. In one instance, three-bedroom bungalows came on the market at £10,000 each. What price did the taxpayer receive for those homes? We are seeing a scandalous waste of taxpayers' money, and that is why Opposition Members will be voting for the motion. We urge Conservative Members, whose motion, in effect, we are discussing this evening, to have the courage to vote in accord with their original thoughts.

Mr. Keith Mans: In one sense at least we are complying with the motion, by debating it. The motion suggests that we should have more consultation. It suggests also that we should have debates in both the other place and this place. A debate has taken place in the other place, and there has been considerable consultation over the past few weeks. Indeed, there has been more than we could have anticipated. Perhaps it would have been

better if we had had that consultation earlier, but, in any event, consultation has taken place. In addition, we have a Select Committee report and an endorsement by the chiefs of staff.
I thank my hon. Friend the Under-Secretary of State for the courteous way in which he has consulted many Conservative Members at least over the past few weeks and taken on board many ideas. I recognise that he has implemented those ideas that he felt able to take on board.
I have no problem with the idea of a prudent Government considering their assets and deciding whether they can sell some off to the benefit of the taxpayer or to the benefit of public matters generally. In that sense, the proposed sell-off is not a privatisation. Nor is it a sale and lease-back. It must not be, for if it were, it would appear on the wrong side of the public accounts. Instead, it is an asset sale, but one that will ensure an outflow of funds in the form of rent from the public sector for at least the next 25 years. I have no problem with that, either.
We must be clear, however, about who is selling the assets and who will be responsible for the outflow of funds. If it is the Treasury that owns all public property in the final analysis, it is right that it should have the benefit of those assets. I suggest that, at the same time, the Treasury should take on board responsibility for the rent that will be paid out over the next 25 years. We know that that rent will come from other than the defence budget. It will be made clear in the Red Book that it does not form part of the defence vote. If it were, that would in another way be a further cut in the defence budget.
When my hon. Friend the Minister responds, I hope that he will give us further assurance that the Treasury will do rather more than simply recognise the outflow of funds and show it to be separate from the defence vote. If in the next two or three years we find that the defence budget is having to take on board some of the costs of the rent, that will negate at least some of the £100 million that will be made available by the Treasury to upgrade quarters over the next five, six or seven years. We cannot have the money twice. Either the money will be used to upgrade quarters or it will be used to contribute to the rent that will have to be paid to the developer who owns the estate.
If we are to ensure that the defence vote is not to receive a cut even before the public expenditure round is complete, we need more reassurance that the Treasury, not the Ministry of Defence, will pay the rent over the next 25 years. The size of the defence budget has decreased considerably over the past five years. The planned total after "Options for Change" has been reduced by £5 billion when the figure for this year is compared with what it was planned to be five years ago. Over the same period, the increase in the social security budget in cash terms exceeds the total sum spent on defence this year.
I strongly believe that, where possible, we must protect the defence budget. I suspect that my right hon. Friend the Secretary of State will manage to protect the defence budget more effectively this year than perhaps his predecessor did when he was having to fight his case against the then Chief Secretary, who was none other than my right hon. Friend. We have cut defence spending in real terms and cash terms, and more than we should have done, in my view, over the past five years.
There is a human side to these matters. I very much welcome the improvements to the scheme—I do not call them concessions—that my right hon. Friend the Secretary of State has mentioned this evening. They will go some way towards alleviating the fears of service men that they will be ejected from their homes for reasons other than service ones. I am certain that the improvements will do much to reassure them.
I sincerely hope also that the reassurances that we have received about what will happen to the estate during the 25 years and afterwards will be correct, because I strongly believe that, into the foreseeable future and well after the 25-year period, we will need a stock of quarters to house our service men. I shall go further than that, and say that it will probably be even more important in future to provide them than in the past, because, if we are to recruit the right people, we must look after not only their equipment and their weapons but their welfare as well.
The motion, the debate and the consultation have been a very positive exercise. It has meant that this matter has been dealt with publicly, as it should be because this is a large asset sale, and many of the problems have been overcome.

Mr. Mike Hall: I have a constituency interest, as in my constituency we have what are known as tobacco houses, which used to house Army personnel from 47th area support group of the US Army following their intervention in the war in 1942. The houses were built some time afterwards and were paid for from the income from tobacco, which is why they were called tobacco houses.
One hundred and nine of the properties were handed over to the Ministry of Defence in June 1992, when the Americans declared that they had no future use for RAF Burtonwood, but 60 were in a poor state of repair and were not fit for habitation, so much investment was needed to make them habitable by service personnel—in terms of energy conservation, double glazing and cavity wall insulation.
In a Ministry of Defence answer last year, we were told that there are only 24 empty properties in my constituency, which must mean that a large number of units have been brought back into use by the MOD. It must have spent a great deal of money in the past four years to bring those properties up to scratch, which will now be sold off over the heads of the residents to a private company. It is a particularly bad deal.
Another problem is that RAF Burtonwood is a discrete estate. The estate, which contains 109 units, has a tennis court, play area and bowling green. The roads and the sewers are not up to standard, and the drains run under the houses, so there will be many problems for years to come. When the MOD sells those properties to a private developer, what will happen to the continuing liability? I am very concerned about that.
There is a huge problem in my constituency, because RAF Burtonwood, which was declared surplus to requirements in June 1993, is now being used as a private storage and distribution depot. It is the largest single above-floor warehouse space in the whole of Europe, and it is being used by the private sector at very low rent. That is causing much concern to my constituents who live in and around the air base. As well as being the local

Member of Parliament, I am one of those residents. The MOD's privatisation programme will adversely affect my constituency.
The deal before the House is a bad one. We will get short-term gain and long-term pain in terms of what will have to be done and the cost of the decision. It is obvious that the taxpayer will be worse off in the long run. We are told that the deal is popular with armed forces personnel who occupy the houses, but why do we not ask them?
When properties were transferred from Warrington new town development corporation to local housing associations, tenants were asked in a ballot who they wanted to become their new landlord. When local authorities want to transfer their houses into the private sector, into housing action trusts, each tenant is given the choice about who their new landlord should be. If this is such a good deal for Army personnel, the Secretary of State, before he does anything else, should consult each and every member of the armed services who lives in these premises to find out their views. If we believe in tenant choice, Army personnel should be given the same choice as that given in the public sector.
This deal is bad for the taxpayer. It is bad for Army personnel. It should be rejected by the House this evening.

Mr. Robert Key: Hindsight is a wonderful thing. When my right hon. Friend the Secretary of State wrote last November to all tenants of Ministry of Defence housing, I wish that we had had a debate such as this, as it would have set the scene for a well-informed debate nationally about the issue. That is my greatest regret.
My position six months ago approximated closely to that of my hon. Friend the Member for Bexleyheath (Mr. Townsend). It has taken me some six months to come to terms with the issues. People have, quite rightly, praised the Army Families Federation and the way in which successive generations of Army and other service families have followed the flag around the empire, the Commonwealth and the world on peacekeeping and peace-enforcing missions, but they should never underestimate the fact that it is not just the wives, families and spouses who are concerned about this; the men in the front line are equally concerned.
Hon. Members who have the honour to represent constituencies with a large number of service men and women and civilian support staff recognise the depth of feeling on the issue. The Army Families Federation has not been representing the views of only a handful of wives. It has been doing an extraordinarily good job. Those of us who have a regular case load of MOD issues will recognise that the Federation persists. I have had a number of meetings and many telephone calls over the past six months with the Federation and other individuals. They have raised many issues that have improved the scheme to the point where, as one of the chiefs of staff said, the scheme that we now have is not the scheme we started with. It is remarkably improved.
Army wives and families who criticise the leadership of the Army Families Federation should know that, of the 10 points that were put to me on 5 July by Cherry Milne, the Federation's president, eight have been addressed and are discussed in depth in the Select Committee's report.


One is the subject of correspondence with Ministers. Another, on the question of Abbey Wood and housing, is one to which we can return at another time.
Many of my hon. Friends will do well to listen to the debates that follow this one. I pay tribute to my hon. Friend the Member for Canterbury (Mr. Brazier), who has, over a decade and more to my certain knowledge, because I have often been beside him, pursued the interests of Army families, as well as the structure of the Army itself. Our constituents have often been in touch with us over the years, but I had a telephone call only this weekend from a retired Colonel, who asked all the right questions and outlined the problems. I just wished that I had been able to divulge to him—I did not, of course—the contents of the Select Committee's report. He will be able to read the debate, as will others.
One of the greatest misconceptions is that the current situation is cost-free. The fact that these huge assets are tied up is expensive for the taxpayer and for public service investment. We do not need sterile arguments about what will happen, and I have heard some utter drivel spoken tonight. We need to get down to the real problem about the quality of housing. I am most concerned about the small percentage of housing that is inferior. It appears to me that much of it is in my constituency, but I am sure that, in reality, it is spread around.
If we are going to talk about realities, about Bulford, Larkhill, and the sort of quarters that our service families put up with, the fact that an extra £100 million will be spent over five to seven years, in addition to the £40 million that has already been spent, must be good news. I particularly welcome the concession on schools, which is very important to families. They move around very loyally, so education becomes ever more important.
I welcome the many changes that have been made. I look forward to a boost in the Defence Housing Executive, which we can confidently expect. The last thing that we and Army families want is yet another review of the Army and its functions, as proposed by the Labour party and others. To the Johnny-come-latelys who have entered the debate, I simply say that, for those of us who have followed this issue over many years, this is a good deal for Army families as well as front-line forces, and I shall support the Government tonight on behalf of my constituents.

Ms Rachel Squire: I shall be brief. My first point is that the experience of service families has not been positive. They have been stretched to the limit by the Government's defence cuts, which have meant families spending more time apart. It is therefore no wonder that Army wives and others have done something which is very rare for them—they have spoken out publicly because they feel badly treated by the Government.
Secondly, it is clear that the policy has been Treasury driven. It is no coincidence that the right hon. Member for South Thanet (Mr. Aitken) moved from the Ministry of Defence to the Treasury after he had been responsible for decisions that affected my constituency and which led to the creation of surplus MOD property and its sale.
Thirdly, people have been badly treated. I cannot quote the communication in full, but I was contacted by a Mr. and Mrs. Trotter. Mr. Trotter served with the Royal Navy

for 22 years—in the Gulf, Bosnia and the Falklands—and is desperate for help, which he was not receiving, in trying to find suitable accommodation for his retirement. Another constituent—a Mr. Anderson—came to see me when the rent for his MOD property was doubled and he was told that he and his family had to find other accommodation by the end of this month.
Fourthly, in Scotland the situation is different for legal reasons and because of the sale of surplus property at Rosyth owing to the Government's defence cuts. The situation there has been marked by obsessive secrecy. I have written to the Minister for the Armed Forces and the Minister of State for Defence Procurement, asking why they have apparently made a deal with Home housing association, which has no property north of the border, and why they did not invite other Scottish-based companies to bid, but I have been given no information and no clear answers.
In view of the plight in which the Government have placed so many service families, I hope that there will be all-party support for the Labour party's motion.

Mr. John Spellar: This debate has rightly focused the House's attention on the vital role played in the life of this country by the armed forces and on the invaluable support given by their families. As we know, that is inextricably tied in with the community spirit of their estates and the support provided by their being surrounded by friends who know the strains and stresses of service life, especially in view of the regrettable recent increase in tension in Northern Ireland. The real question is whether the proposed sale adds or detracts from that. In our view, it surely undermines the system, which is why I believe that the Select Committee's report said that the jury is still out. It is also why the matter has aroused such cross-party concern.
The Chairman of the Select Committee on Defence said that the Committee's report raised as many questions as it provided answers. I must say that the Secretary of State's speech did not provide those answers, especially not to some of the important questions. For example, it is not clear how much it will cost to bring the estate up to grade one standard. Although pressed, the Secretary of State did not specify the other public sector investments for which he said the money would be available.
The concern raised by the hon. Member for Bexleyheath (Mr. Townsend) was mirrored in The Economist, which recently stated:
Should the Government be forced to withdraw the privatisation, Mr. Portillo would be hard pushed to stop the Treasury deducting the missing money from his budget. That would mean cancelling programmes for new weapons—which is why the generals, unlike the men and women they command, want the privatisation".
I could understand the reaction of service chiefs faced with that case, even though any analysis would show that it does not stand up for a second. But has the case in fact been made? Is it true? Has the connection been made? We need a categorical statement on the matter.
The Secretary of State alluded to, but did not deal properly with, the fact that the MOD has lost long-term control of the future of the estate. The MOD may make a decision on an exchange on military grounds, but, as far as we can see, it can be overruled by a civilian arbitrator. Families may be consulted—let me make it clear that that


is a welcome change—but the decision will not be in their hands, nor in the hands of the MOD, the House or another place.
The consultation is welcome but it is largely cosmetic. Indeed, it is not the consultation that was proposed in the early-day motion or in the resolution—it is consultation after 25 years, not consultation before the sale. In any event, as has been mentioned by hon. Members of all parties, it does not alter the fundamental weaknesses of the scheme, which is still a matter of concern to the hon. Members for Canterbury (Mr. Brazier) and for Bexleyheath.
Let us consider the £100 million for upgrading, which was mentioned by many hon. Members, especially the hon. and learned Member for Fife, North-East (Mr. Campbell). I find it astonishing that, in their amendment, the Government are still setting great store by the £100 million of what they claim is new funding. First, it is £20 million a year over five years, or even less if it is over seven years. That may impress the right hon. Member for South Thanet (Mr. Aitken), but I am not sure that it impresses Army families.
Secondly, last year alone, the MOD spent £126 million on repairs and £40 million on upgrading the estate. The £20 million is a welcome increase, but it is a small percentage of the total. Thirdly, there is no guarantee of additionality. The Minister of State for Defence Procurement must tell us how much will be spent in each of the next five years on repairs and upgrading; if not, the scheme has as much substance as Scotch mist or a promise made on a wet Thursday night i n Dudley town hall.
Where will that leave the MOD? It leaves it precisely with the concern expressed by the Select Committee—that, in the longer term, the Treasury might press for any gap that may arise between the money paid by the MOD and the money received from the occupants to be closed. That reality is glaringly obvious, not only to the Select Committee but to service families around the country. If the Minister has any doubts about their feelings on the subject, I hope that the MOD official who covered my meeting with Army wives in Colchester will have made them clear.
What have the service families lost? They have lost the possibility of the discounted sales scheme, which has not been mentioned today. This year they have already had rent increases of between 10 per cent. and 25 per cent and have been warned that more are on the way. They are concerned that financial pressures will reduce the availability of housing and create difficulties as they move from one establishment to another. The sale will only make things worse, and it is therefore no wonder that they are fearful for the future.
It is also clear that the proposal is financially a bad deal for the country. In this dash for cash, the MOD is taking on an open-ended commitment. One does not have to follow the figures that appeared in The Times to realise that annual payments towards the end of the first 25 years could be substantial and, indeed, could well exceed the original purchase price. While house prices have been falling recently, private sector rents have been rocketing—up 19 per cent. in 1994, 22 per cent. in 1993, 26 per cent. in 1992 and 26 per cent. in 1991. The Government are selling at the bottom end of the market and renting on a rising tide. As many hon. Members have asked, what will that ultimately mean for the MOD's budget?
What are the key attractions for the purchasers? They are getting a steady guaranteed income stream that can only be adjusted upwards, as I have outlined—and for what? Contrary to the views of the hon. Member for North-West Surrey (Sir M. Grylls), they will not have to use private sector skills and will not be managing or maintaining the estate. All that they have to do is rake in the cash and sell the spare property, although what bankers in Tokyo, New York and Amsterdam know about the property market in Portsmouth or East Anglia is quite beyond me. Presumably, the purchasers are hiring people who do know about it, but why the MOD cannot do the same is equally beyond me.
I also find it remarkable that when we recently debated the Armed Forces Bill, we were told—rightly, to my mind—that the armed forces were a special case. Yet now, because the Chancellor of the Exchequer has got his sums wrong, we are told that their housing should be treated like any other commercial transaction. That is significant because in a country such as ours which has an unwritten constitution, it is very important to acknowledge the informal relationships that keep society together. We have a strong tradition of our armed forces being loyal to the Government of the day. In turn, the troops are loyal to the armed forces and wives and families are loyal to the troops. All those relationships are reinforcing, but they must be reciprocal. That is the unwritten contract that we have with our forces. If it appears, or even believed, that the Government are not loyal to service families, shock waves run through the system, affecting not only recruitment but retention, with all the subsequent impact on morale and operational effectiveness.
As many families fear, the Government may have decided that they want the forces to comprise primarily single young men. If so, they should come clean and say so, allowing service men and their families to make a decision about their future. If the Government have taken that decision, it would be a retrograde step, especially since the Army is involved in peacekeeping operations, which require a balance of personnel including mature and experienced soldiers, and what all the services increasingly need—it is part of the Bat report that has been mentioned—are trained, experienced, technical personnel. [Interruption.] I tell the Minister and Conservative Members that that fear has been expressed to me very strongly by Army wives. The Minister needs to dispel those fears by not only words but deeds.
We need to strip the scheme down to the essentials and consider it apart from all the fripperies. As has been rightly mentioned, it is not a privatisation. Nor is it a property deal. It is a shuffling of the financial pack to help out the Chancellor. Essentially, it is a sale and lease-back scheme. Whatever the hon. Member for Wyre (Mr. Mans) says, that is the scheme's essential financial nature. It is a live now, pay later scheme. It is not defence led; it is Treasury driven.
Future Governments, the armed forces and service men and women and their families will be paying for the scheme—without even being properly consulted before the sale. That is why I have no hesitation in asking not only my hon. Friends but Members of all parties who have the interests of the armed forces at heart to join me in the Lobby.

The Minister of State for Defence Procurement (Mr. James Arbuthnot): I can say without fear of contradiction that this has been one of the best debates that I have attended in the House. Hon. Members on both sides of the House have made speeches of deep passion and knowledge, and it is an honour to be able to take part in the debate. To those to whom I shall be unable to respond directly—there will be several, I am afraid—I apologise. I will write to them after the debate.
I must first deal with the point raised by the hon. Member for Pembroke (Mr. Ainger) about the application of the Crichel Down rules. A very small number of properties are being considered in relation to Crichel Down. The sale package has not yet been finalised, but we hope to sort out those properties very soon.
My hon. Friend the Member for Romsey and Waterside (Mr. Colvin), the Chairman of the Select Committee on Defence, went through the Committee's report, which we have welcomed and found extremely constructive and helpful. I thoroughly enjoyed giving evidence to the Select Committee. It was an instructive experience, even when faced with Jesuits.
My hon. Friend the Member for Romsey and Waterside raised the important point about future rent, as did my hon. Friend the Member for Wyre (Mr. Mans). The question was whether the Treasury compensation would grow in real terms in line with any rental growth. Rental growth has been taken into account in our calculations. I do not want to say precisely what rental growth we expect, but it is nothing like that suggested in a rather absurd article in The Times recently. There will be a reduction in the number of quarters that we rent back, and that will of course offset the growth in rents. The bottom line is that the defence budget will not be the loser, which is very important.
My hon. Friend the Member for Romsey and Waterside also asked whether £2,000 a dwelling would be enough to upgrade MOD quarters. As my hon. Friend the Member for Beaconsfield (Mr. Smith) rightly pointed out, about 50 per cent. of the houses in the MOD's possession are in top condition. We will want to concentrate the spending on those in the worst condition.
The hon. and learned Member for Fife, North-East (Mr. Campbell), who is a member of the Select Committee, made an interesting speech in which he said that the purchaser has no risk, as did the hon. Member for Warley, West (Mr. Spellar). When the hon. and learned Gentleman was looking at the Select Committee report, perhaps he should have read paragraph 76, which says:
It is clear that the MoD marketing of the estate has been approached professionally, and put to prospective bidders in a way that encourages them to expect a potentially profitable but not risk free acquisition.
[HON. MEMBERS: "Go on."] That was the end of the paragraph.
I turn to the important speech of my hon. Friend the Member for Canterbury (Mr. Brazier). I am grateful for what he said about a significant number of concessions of substance. As he said, moves have already taken place. He also referred to some moves in his constituency—I think that they were in his constituency.

Mr. Brazier: They were not.

Mr. Arbuthnot: In either event, I am not familiar with the specific case to which he referred, but I draw attention

to the circumstances in which individuals may be called to move because we need to release surplus properties in discrete blocks. We have a conflict. We have to reduce the number of empty properties that the MOD owns, yet, because of the points that he among others raised, we need to preserve the coherence of the regimental patch. We could address that problem either by pepper-potting civilians into military estates, which would not be satisfactory, or by moving people in order to ensure that we can release discrete blocks. The only alternative would be to leave empty the current 12,000 empty properties, but that is not acceptable.

Mr. Hugh Bayley: Will the Minister give way?

Mr. Arbuthnot: I am sorry. I am afraid that I do not have time.
My hon. Friend the Member for Bexleyheath (Mr. Townsend) raised a number of important issues. He suggested that we might be overthrowing a system that has been in existence since the war. We are not really doing that. We are ensuring that we have a significant amount of money to upgrade the property in which our service men and women live, which must be of benefit to the country. Opposition Members cannot dismiss lightly the £100 million as though it were an irrelevance. That is the amount that the Defence Housing Executive believes is needed to upgrade substandard properties to the proper standard.

Mr. Spellar: Does the Minister accept that he is talking about more than £50 million for one estate alone?

Mr. Arbuthnot: No, because the amount that the hon. Gentleman is suggesting, which relates to the estate that he went round only last Thursday, would be quite sufficient to knock down and rebuild the entire estate. I am afraid that he is wrong on that.

Mr. Bayley: Will the Minister give way?

Mr. Arbuthnot: No. Furthermore, that amount is additional to what we already have and represents an increase of 50 per cent. every year over the period in which we believe that we can spend it.
My right hon. Friend the Member for South Thanet (Mr. Aitken) made an important speech in which he said that the support of the chiefs of staff was important. I agree. The chiefs of staff have said that the position has improved dramatically and their concerns have been allayed.
My hon. Friend the Member for Wyre (Mr. Mans) said that the Treasury would need to fund the rent over 25 years. I have made it clear there will be no detriment to the defence budget in respect of that transaction. He said that we would need stocks of quarters in future in order to improve recruitment into the armed services. He was absolutely right and my right hon. Friend the Secretary of State concentrated on that point.
As for the speech by my hon. Friend the Member for Salisbury (Mr. Key), I agreed with every single word, as I said in the Select Committee.
The hon. Member for Warley, West (Mr. Spellar) made an extraordinary speech in which he got virtually every statistic wrong. He said that it was not clear how much it


would cost to improve the estate. I have already said—on the advice of the Defence Housing Executive—that it would cost £100 million. That is the amount we are getting as an addition to the budget. He said that there was no guarantee of additionality. The Treasury has guaranteed that it will be additional to the defence budget. He said that £20 million a year was a small proportion of the money already spent. It is a 50 per cent. increase in upgrading on the amount that we already spend. I cannot go through his entire speech as it would take me until tomorrow morning to correct every aspect that he got wrong.
The public profile of the married quarters estate has risen considerably over the past few weeks. In their early-day motion, my hon. Friends—not the Opposition—expressed a number of concerns which reflected the genuine worries of the people occupying the married quarters. I hope that this evening we have demonstrated the Government's determination to protect the interests of service families and the maintenance of the service way of life. Any suggestion by the Opposition that we are not mindful of those interests is utterly wrong.
Morale and confidence are vital and they must and will be sustained. Therefore, we attach the greatest possible importance to the preservation of the patch and all that goes with it and all that it means for the solidarity and security of service families.
When service men and women are serving abroad, the last thing they need is to worry about is their families back at home. Of course we recognise that, so we shall ensure that nothing in the sale leads to the break-up of the patch.
In addition, we have secured a good deal for the taxpayer. We have consulted widely in recent months and responded positively and constructively to the points made to us by families' representatives, hon. Members and those in another place. The services can be confident that the housing in which they live in future will be of a better standard than they have been used to in the past and the taxpayer can be assured that the waste of empty public accommodation will come to an end. I commend the Government's amendment to the House and invite my right hon. and hon. Friends to reject the Opposition motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 275, Noes 307.

Division No. 203]
[7.03 pm


AYES


Abbott, Ms Diane
Beckett, Rt Hon Margaret


Adams, Mrs Irene
Beith, Rt Hon A J


Ainger, Nick
Bell, Stuart


Ainsworth, Robert (Cov'try NE)
Benn, Rt Hon Tony


Allen, Graham
Bennett, Andrew F


Alton, David
Bermingham, Gerald


Anderson, Donald (Swansea E)
Berry, Roger


Armstrong, Hilary
Betts, Clive


Ashdown, Rt Hon Paddy
Blair, Rt Hon Tony


Ashton, Joe
Boateng, Paul


Austin-Walker, John
Bradley, Keith


Banks, Tony (Newham NW)
Bray, Dr Jeremy


Barnes, Harry
Brown, Gordon (Dunfermline E)


Barron, Kevin
Brown, N (N'c'tle upon Tyne E)


Battle, John
Bruce, Malcolm (Gordon)


Bayley, Hugh
Byers, Stephen





Caborn, Richard
Hardy, Peter


Callaghan, Jim
Harman, Ms Harriet


Campbell, Mrs Anne (C'bridge)
Harvey, Nick


Campbell, Menzies (Fife NE)
Hattersley, Rt Hon Roy


Campbell, Ronnie (Blyth V)
Henderson, Doug


Campbell-Savours, D N
Heppell, John


Cann, Jamie
Hill, Keith (Streatham)


Chidgey, David
Hinchliffe, David


Chisholm, Malcolm
Hodge, Margaret


Church, Judith
Hoey, Kate


Clapham, Michael
Hogg, Norman (Cumbernauld)


Clark, Dr David (South Shields)
Home Robertson, John


Clarke, Eric (Midlothian)
Hood, Jimmy


Clarke, Tom (Monklands W)
Hoon, Geoffrey


Clelland, David
Howarth, George (Knowsley North)


Clwyd, Mrs Ann
Howells, Dr Kim (Pontypridd)


Coffey, Ann
Hoyle, Doug


Cohen, Harry
Hughes, Kevin (Doncaster N)


Connarty, Michael
Hughes, Robert (Aberdeen N)


Cook, Frank (Stockton N)
Hughes, Roy (Newport E)


Cook, Robin (Livingston)
Hughes, Simon (Southwark)


Corbett, Robin
Hutton, John


Corbyn, Jeremy
Illsley, Eric


Corston, Jean
Ingram, Adam


Cousins, Jim
Jackson, Glenda (H'stead)


Cox, Tom
Jackson, Helen (Shef'ld, H)


Cummings, John
Jamieson, David


Cunningham, Jim (Covy SE)
Janner, Greville


Cunningham, Rt Hon Dr John
Jenkins, Brian (SE Staff)


Dafis, Cynog
Johnston, Sir Russell


Dalyell, Tam
Jones, Barry (Alyn and D'side)


Darling, Alistair
Jones, leuan Wyn (Ynys Môn)


Davidson, Ian
Jones, Jon Owen (Cardiff C)


Davies, Bryan (Oldham C'tral)
Jones, Lynne (B'ham S O)


Davies, Chris (L'Boro & S'worth)
Jones, Nigel (Cheltenham)


Davies, Rt Hon Denzil (Llanelli)
Jowell, Tessa


Davies, Ron (Caerphilly)
Kaufman, Rt Hon Gerald


Davis, Terry (B'ham, H'dge H'l)
Keen, Alan


Denham, John
Kennedy, Charles (Ross,C&S)


Dewar, Donald
Kennedy, Jane (L'pool Br'dg'n)


Dixon, Don
Khabra, Piara S


Dobson, Frank
Kilfoyle, Peter


Donohoe, Brian H
Kirkwood, Archy


Dunwoody, Mrs Gwyneth
Lestor, Joan (Eccles)


Eagle, Ms Angela
Lewis, Terry


Eastham, Ken
Liddell, Mrs Helen


Etherington, Bill
Livingstone, Ken


Evans, John (St Helens N)
Lloyd, Tony (Stretford)


Fatchett, Derek
Uwyd, Elfyn


Faulds, Andrew
Loyden, Eddie


Field, Frank (Birkenhead)
Lynne, Ms Liz


Flynn, Paul
McAllion, John


Foster, Don (Bath)
McAvoy, Thomas


Foulkes, George
McCartney, Ian


Fraser, John
Macdonald, Calum


Fyfe, Maria
McFall, John


Galbraith, Sam
McKelvey, William


Galloway, George
Mackinlay, Andrew


Gapes, Mike
McLeish, Henry


Garrett, John
Maclennan, Robert


George, Bruce
McMaster, Gordon


Gerrard, Neil
McNamara, Kevin


Gilbert, Rt Hon Dr John
MacShane, Denis


Godman, Dr Norman A
McWilliam, John


Godsiff, Roger
Madden, Max


Golding, Mrs Uin
Maddock, Diana


Gordon, Mildred
Mahon, Alice


Graham, Thomas
Mandelson, Peter


Grant, Bernie (Tottenham)
Marek, Dr John


Griffiths, Nigel (Edinburgh S)
Marshall, David (Shettleston)


Griffiths, Win (Bridgend)
Martin, Michael J (Springburn)


Grocott, Bruce
Martlew, Eric


Gunnell, John
Maxton, John


Hain, Peter
Meacher, Michael


Hall, Mike
Meale, Alan


Hanson, David
Michael, Alun






Michie, Bill (Sheffield Heeley)
Shore, Rt Hon Peter


Michie, Mrs Ray (Argyll & Bute)
Short, Clare


Mitchell, Austin (Gt Grimsby)
Simpson, Alan


Moonie, Dr Lewis
Skinner, Dennis


Morgan, Rhodri
Smith, Andrew (Oxford E)


Morley, Elliot
Smith, Chris (Isl'ton S & F'sbury)


Morris, Rt Hon Alfred (Wy'nshawe)
Smith, Llew (Blaenau Gwent)


Morris, Estelle (B'ham Yardley)
Snape, Peter


Morris, Rt Hon John (Aberavon)
Soley, Clive


Mowlam, Marjorie
Spearing, Nigel


Mudie, George
Spellar, John


Mullin, Chris
Squire, Rachel (Dunfermline W)


Murphy, Paul
Steel, Rt Hon Sr David


Nicholson, Emma (Devon West)
Steinberg, Gerry


Oakes, Rt Hon Gordon
Stevenson, George


O'Brien, William (Normanton)
Strang, Dr. Gavin


O'Hara, Edward
Straw, Jack


Olner, Bill
Sutcliffe, Gerry


O'Neill, Martin
Taylor, Mrs Ann (Dewsbury)


Orme, Rt Hon Stanley
Taylor, Matthew (Truro)


Parry, Robert
Thompson, Jack (Wansbeck)



Tipping, Paddy


Pearson, Ian
Touhig, Don


Pendry, Tom
Townsend, Cyril D (Bexl'yh'th)


Pickthall, Colin
Trickett, Jon


Pike, Peter L
Turner, Dennis


Pope, Greg
Tyler, Paul


Powell, Sir Ray (Ogmore)
Vaz, Keith


Prentice, Bridget (Lew'm E)
Walker, Rt Hon Sir Harold


Prentice, Gordon (Pendle)
Walley, Joan


Purchase, Ken
Wardell, Gareth (Gower)


Quin, Ms Joyce
Wareing, Robert N


Radice, Giles
Watson, Mike


Raynsford, Nick
Wicks, Malcolm


Reid, Dr John
Wigley, Dafydd


Rendel, David
Williams, Rt Hon Alan (Sw'n W)


Robertson, George (Hamilton)
Williams, Alan W (Carmarthen)


Robinson, Geoffrey (Co'try NW)
Wilson, Brian


Roche, Mrs Barbara
Winnick, David


Rogers, Allan
Wise, Audrey


Rooker, Jeff
Worthington, Tony


Rooney, Terry
Wray, Jimmy


Ross, Ernie (Dundee W)
Wright, Dr Tony


Rowlands, Ted
Young, David (Bolton SE)


Ruddock, Joan



Sedgemore, Brian
Tellers for the Ayes:


Sheerman, Barry
Mr. Joe Benton and Ms Janet Anderson.


Sheldon, Rt Hon Robert





NOES


Ainsworth, Peter (East Surrey)
Boswell, Tim


Aitken, Rt Hon Jonathan
Bottomley, Peter (Eltham)


Alison, Rt Hon Michael (Selby)
Bottomley, Rt Hon Virginia


Allason, Rupert (Torbay)
Bowden, Sir Andrew


Amess, David
Bowis, John


Arbuthnot, James
Boyson, Rt Hon Sir Rhodes


Arnold, Jacques (Gravesham)
Brandreth, Gyles


Arnold, Sir Thomas (Hazel Grv)
Bright, Sir Graham


Ashby, David
Brooke, Rt Hon Peter


Aspinwall, Jack
Brown, M (Brigg & Cl'thorpes)


Atkins, Rt Hon Robert
Browning, Mrs Angela


Atkinson, Peter (Hexham)
Bruce, Ian (South Dorset)


Baker, Rt Hon Kenneth (Mole V)
Budgen, Nicholas


Baker, Nicholas (North Dorset)
Burns, Simon


Baldry, Tony
Burt, Alistair


Banks, Matthew (Southport)
Butler, Peter


Banks, Robert (Harrogate)
Butterfill, John


Batiste, Spencer
Carlisle, John (Luton North)


Beggs, Roy
Carlisle, Sir Kenneth (Lincoln)


Bellingham, Henry
Carrington, Matthew


Bendall, Vivian
Carttiss, Michael


Beresford, Sir Paul
Cash, William


Biffen, Rt Hon John
Channon, Rt Hon Paul


Body, Sir Richard
Chapman, Sir Sydney


Bonsor, Sir Nicholas
Churchill, Mr


Booth, Hartley
Clappison, James





Clark, Dr Michael (Rochford)
Heath, Rt Hon Sir Edward


Clarke, Rt Hon Kenneth (Ru'clif)
Heathcoat-Amory, Rt Hon David


Clifton-Brown, Geoffrey
Hendry, Charles


Coe, Sebastian
Higgins, Rt Hon Sir Terence


Colvin, Michael
Hill, Sir James (Southampton Test)


Congdon, David
Hogg, Rt Hon Douglas (G'tham)


Coombs, Anthony (Wyre For'st)
Horam, John


Coombs, Simon (Swindon)
Hordern, Rt Hon Sir Peter


Cope, Rt Hon Sir John
Howard, Fit Hon Michael


Cormack, Sir Patrick
Howell, Rt Hon David (G'dford)


Couchman, James
Howell, Sir Ralph (N Norfolk)


Cran, James
Hughes, Robert G (Harrow W)


Currie, Mrs Edwina (S D'by'ire)
Hunt, Rt Hon David (Wirral W)


Curry, David (Skipton & Ripon)
Hunt, Sir John (Ravensbourne)


Davies, Quentin (Stamford)
Hunter, Andrew


Davis, David (Boothterry)
Hurd, Rt Hon Douglas


Day, Stephen
Jack, Michael


Deva, Nirj Joseph
Jackson, Robert (Wantage)


Devlin, Tim
Jenkin, Bernard


Dorrell, Rt Hon Stephen
Jessel, Toby


Douglas-Hamilton, Lord James
Johnson Smith, Sir Geoffrey


Dover, Den
Jones, Gwilym (Cardiff N)


Duncan, Alan
Jones, Robert B (W Hertfdshr)


Duncan Smith, Iain
Jopling, Rt Hon Michael


Dunn, Bob
Kellett-Bowman, Dame Elaine


Durant, Sir Anthony
Key, Robert


Dykes, Hugh
King, Rt Hon Tom


Eggar, Rt Hon Tim
Kirkhope, Timothy


Elletson, Harold
Knapman, Roger


Emery, Rt Hon Sir Peter
Knight Mrs Angela (Erewash)


Evans, David (Welwyn Hatfield)
Knight, Rt Hon Greg (Derby N)


Evans, Jonathan (Brecon)
Knight Dame Jill (Bir'm E'st'n)


Evans, Nigel (Ribbb Valley)
Knox, Sir David


Evans, Roger (Monmouth)
Kynoch, George (Kincardine)


Evennett, David
Lait, Mrs Jacqui


Faber, David
Lamont, Rt Hon Norman


Fabricant, Michael
Lang, Rt Hon Ian


Fenner, Dame Peggy
Lawrence, Sir Ivan


Field, Barry (Isle of Wight)
Legg, Barry


Fishbum, Dudley
Leigh, Edward


Forman, Nigel
Lennox-Boyd, Sir Mark


Forsyth, Rt Hon Michael (Stirling)
Lester, Sir James (Broxtowe)


Forth, Eric
Lidington, David


Fowler, Rt Hon Sir Norman
Lilley, Rt Hon Peter


Fox, Dr Liam (Woodspring)
Lloyd, Rt Hon Sir Peter (Fareham)


Fox, Rt Hon Sir Marcus (Shipley)
Lord, Michael


Freeman, Rt Hon Roger
Lyell, Rt Hon Sir Nicholas


French, Douglas
MacGregor, Rt Hon John


Fry, Sir Peter
MacKay, Andrew


Gale, Roger
Maclean, Rt Hon David


Gallie, Phil
McLoughlin, Patrick


Gardiner, Sir George
McNair-Wilson, Sir Patrick


Garnier, Edward
Madel, Sir David


Gill, Christopher
Maitland, Lady Olga


Gillan, Cheryl
Major, Rt Hon John


Goodlad, Rt Hon Alastair
Malone, Gerald


Goodson-Wickes, Dr Charles
Mans, Keith


Gorman, Mrs Teresa
Marland, Paul


Gorst, Sir John
Marlow, Tony


Grant, Sir A (SW Cambs)
Marshall, John (Hendon S)


Greenway, Harry (Ealing N)
Marshall, Sir Michael (Arundel)


Greenway, John (Ryedale)
Martin, David (Portsmouth S)


Griffiths, Peter (Portsmouth, N)
Mates, Michael


Grylls, Sir Michael
Mawhinney, Ftt Hon Dr Brian


Gummer, Rt Hon John Selwyn
Mellor, Rt Hon David


Hague, Rt Hon William
Merchant, Piers


Hamilton, Rt Hon Sir Archibald
Mills, Iain


Hamilton, Neil (Tatton)
Mitchell, Andrew (Gedling)


Hampson, Dr Keith
Mitchell, Sir David (NW Hants)


Hannam, Sir John
Moate, Sir Roger


Hargreaves, Andrew
Molyneaux, Rt Hon Sir James


Haselhurst, Sir Alan
Monro, Rt Hon Sir Hector


Hawkins, Nick
Montgomery, Sir Fergus


Hawksley, Warren
Needham, Rt Hon Richard


Hayes, Jerry
Nelson, Anthony


Heald, Oliver
Neubert, Sir Michael






Newton, Rt Hon Tony
Squire, Robin (Hornchurch))


Nicholls, Patrick
Stanley, Rt Hon Sir John


Nicholson, David (Taunton)
Steen, Anthony


Norris, Steve
Stephen, Michael


Onslow, Rt Hon Sir Cranley
Stem, Michael


Oppenheim, Phillip
Stewart, Allan


Ottaway, Richard
Streeter, Gary


Page, Richard
Sumberg, David


Paice, James
Sweeney, Walter


Patnick, Sir Irvine
Sykes, John


Patten, Rt Hon John
Tapsell, Sir Peter


Pattie, Rt Hon Sir Geoffrey
Taylor, Ian (Esher)


Pawsey, James
Taylor, John M (Solihull)


Peacock, Mrs Elizabeth
Taylor, Sir Teddy (Southend, E)


Pickles, Eric
Temple-Morris, Peter


Porter, Barry (Wirral S)
Thomason, Roy


Porter, David (Waveney)
Thompson, Sir Donald (C'er V)


Portillo, Rt Hon Michael
Thompson, Patrick (Norwich N)


Powell, William (Corby)
Thornton, Sir Malcolm


Rathbone, Tim
Thurnham, Peter


Redwood, Rt Hon John
Townend, John (Bridlington)


Renton, Rt Hon Tim
Tracey, Richard


Richards, Rod
Tredinnick, David


Riddick, Graham
Trend, Michael


Rifkind, Rt Hon Malcolm
Trotter, Neville


Robathan, Andrew
Twinn, Dr Ian


Roberts, Rt Hon Sir Wyn
Vaughan, Sir Gerard


Robertson, Raymond (Ab'd'n S)
Viggers, Peter



Waldegrave, Rt Hon William


Robinson, Mark (Somerton)
Walden, George


Roe, Mrs Marion (Broxboume)
 Walker, Bill (N Tayside)


Ross, William (E Londonderry)
Waller, Gary


Rowe, Andrew (Mid Kent)
Ward, John


Rumbold, Rt Hon Dame Angela
Wardle, Charles (Bexhill)


Ryder, Rt Hon Richard
Waterson, Nigel


Sackville, Tom
Watts, John


Sainsbury, Rt Hon Sir Timothy
Wells, Bowen


Scott, Rt Hon Sir Nicholas
Whitney, Ray


Shaw, David (Dover)
Whittingdale, John


Shephard, Rt Hon Gillian
Widdecombe, Ann


Shepherd, Sir Colin (Hereford)
Wiggin, Sir Jerry


Shersby, Sir Michael
Wilkinson, John


Sims, Sir Roger
Willetts, David


Skeet, Sir Trevor
Wilshire, David


Smith, Tim (Beaconsfield)
Winterton, Mrs Ann (Congleton)


Smyth, The Reverend Martin
Winterton, Nicholas (Macc'f'ld)


Soames, Nicholas
Wolfson, Mark


Speed, Sir Keith
Wood, Timothy


Spencer, Sir Derek
Yeo, Tim


Spicer, Sir James (W Dorset)
Young, Rt Hon Sir George


Spicer, Sir Michael (S Worcs)



Spink, Dr Robert
Tellers for the Noes:


Spring, Richard
Mr. Derek Conway and Mr. Michael Bates.


Sproat, Iain

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

Mr. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House supports the Government in its determination to improve the quality and management of service housing; notes that the proposed sale of the married quarters estate in England and Wales will release £100 million of new funding to upgrade married quarters throughout the United Kingdom, and enable the Ministry of Defence to dispose more efficiently of surplus properties; notes that the sale will have no bearing on the charges service personnel pay for their quarters; recognises that the interests of the services and service families have been properly protected; and accepts the judgment of the Government and the Chiefs of Staff that the sale offers the right basis for real improvements in service housing which are long overdue.

Energy Policy

Mr. Deputy Speaker (Mr. Michael Morris): We now move to the next debate, which is on energy policy. I have to announce that Madam Speaker has selected the amendment in the name of the Prime Minister.

Mr. John Battle: I beg to move,
That this House notes that British Energy has been privatised for just £1.4 billion, well below the Government's early estimates and proof that the sale was a bad deal for the taxpayer which was carried through in defiance of basic common sense; notes that there is no sign of a strategy from the Government upon the ad hoc restructuring of the electricity industry in which companies and billions of pounds have changed hands but consumers have become an afterthought; further notes that, as more coal pits close, there is no sign of a strategy on the effect of the renegotiation of the coal contracts in 1998 or of the take-or-pay gas contracts problem and no sign of leadership on the introduction of competition into the domestic gas and electricity supply industries in 1998, risking chaos and a crisis of public confidence in competition; and calls on the Government to establish a framework to promote efficient energy industries delivering a fair deal for consumers.
According to press accounts, the Minister for Industry and Energy will relinquish his post soon, and he has already informed us that he intends to stand down from Parliament. I believe that his intention, on going into the private sector, was to leave us on a high note following the successful privatisation of British Energy—that "final burst of energy".
I understand that on 12 July the right hon. Gentleman delivered a valedictory address subtitled, "Some thoughts on energy policy, past, present and future", in which he helpfully admitted:
there's still a few things to be sorted out.
Perhaps that was a coded way of telling us that he is leaving behind him an in-tray stacked high.
One tribute in the Evening Standard report of the Minister's leaving says:
One major unresolved issue left by the minister is the introduction of competition in the domestic electricity market, in theory due to start in 1998.
This week Sir Denis Rooke, who was the head of British Gas from 1976 to 1989, declared that millions of "Sids" had been conned into buying shares:
Over the years 'Sid' certainly has been conned … There's not even been any real explanation … What is happening is the kind of mess I thought we were going to get into. It happens to be much greater, and faster, than I'd expected".
So much for the dream of shareholder democracy that the Conservative party held out to the Sids.
In The Times today, under the headline, "Damning report for electricity competition plan", we find an article spelling out Coopers and Lybrand's view that the plans to bring competition to 23 million domestic energy customers
will fail or be significantly delayed, with the inevitable resultant recriminations and potential harm to the industry and its customers".


In today's "City Comment" column in the Evening Standard we read:
The British Energy flotation"—
that is, the nuclear privatization—
has combined bad subject matter, bad luck and bad judgment … the advisers look foolish, the Government is poorer than it hoped and Sid is out in the cold … It is an ignominious end to a story that was jaded from the start.
If that is the note on which the right hon. Gentleman hopes to leave, he is getting out of the way in time before the flak catches up with him.
In recent months, the Labour party has twice forced the Government to come to the Chamber to debate nuclear privatisation—on 26 March and 18 June. After each debate, our critical questions were left unanswered. Our view—that this fag-end privatisation would prove to be a bad deal for the taxpayer—has proved to be right. Sadly, it is fast proving to be a bad deal for the 606,000 who have bought shares since then. They have seen their shares falling in value, and they do not yet have their share certificates—so they cannot even get themselves out of the privatisation.
We objected to the selling off of the eight nuclear power stations for less than the cost of building a single one—the new Sizewell B. BZW, the Government's advisers—who put the prospectus together—originally suggested a valuation of £2.4 billion. However, the price in the end was £1.4 billion—well below the original estimate. It was a giveaway sale by the Government, who were fixed on a last desperate dash for cash. We argued that the cash-generating profitable part had been sold off too cheaply, while millions of pounds of liabilities would remain with taxpayers for generations to come.

Mr. Jacques Arnold: How can the hon. Gentleman say that it has been sold off too cheaply, as anything only has the value that someone is prepared to pay for it? If the market is now pricing it at below the level at which it was sold, did not the taxpayer get a very good deal?

Mr. Battle: I am delighted by that intervention. We once had monetarism and neo-Reaganomics, but we now have the economics of the car boot sale—it does not matter what we get for it as long as we get something. The point is that the Government have sold off assets at well below their value to the taxpayer, and the taxpayer will carry on paying for those assets for years to come. The sale has proved to be a bad deal for the shareholders as well. The estimates of the productive efficiency of the power stations, which at the time were set at 83 per cent., were well above 75 per cent.—the usual performance of the reactors. In other words, they were grossly optimistic.
When we challenged the Government on reports of faults at Hunterston B power station, we were accused by the Minister of scaremongering. Yet within five hours of the closure of the sale of shares on 10 July, the company publicly revealed that two out of the seven privatised advanced gas-cooled reactors—Hunterston B and Hinkley Point—had been found to have identical steam leak weld faults, and both were taken out of service.
Before the Minister leaves, perhaps he will tell us when he and his Department knew of those faults. Why were the potential investors not told? Why was the problem

not even spelt out in the prospectus? Can he confirm the chronology of the problems with the re-heat boiler pipe weld cracks on Hinkley Point B and Hunterston B? In late March, Hunterston B reactor 4 load was reduced and the C quadrant boiler was taken out of service with a suspected steam crack. It was shut down on 13 April, but was re-opened at 75 per cent. of capacity on 4 May after the removal of the defective pipe. It was then put into what is called statutory outage for repairs on 1 June.
When we challenged the Government on 4 June to publish the Clifford Chance report that made direct references to the steam cracking, we were told that these matters would be dealt with in the forthcoming prospectus. We asked for that Clifford Chance report to be put in the public domain, and I again ask the Minister to do that, so that the details of what went on can be known. I hope that the Minister will confirm that, on 7 June, Hinkley Point B also moved into statutory outage. Yet, for some reason, it took 28 days until 4 July to reveal that a similar fault with steam pipe weld cracks had been discovered on reactor 4 of Hinkley Point B as well. Why did it take 28 days for that fault to be revealed?
The Minister may claim that the problem was announced in advance and that the shareholders ought to have picked it up. But it was published in that well-known and well-read journal, the "British Energy Monthly Output" figures. It appeared on 4 July, but only as a footnote on weld inspections at Hinkley and Hunterston. I do not think that those who have bought shares will think that that is good enough. They will believe that they have been seriously short-changed.

Mr. Alan Duncan: The hon. Gentleman is telling the House that because certain reactor faults were not made public, shareholders have overpaid for the purchase of nuclear energy shares. How does he reconcile that with his earlier comment that the Government did not get a sufficiently high asset price for the sale?

Mr. Battle: We know that the reactors were undersold because of the price of building them, and we have seen today that the cost of the shares is falling through the floor—89p is I believe the price today. [Interruption.] I do not think that the shareholders will be amused by the remarks of the hon. Member for Rutland and Melton (Mr. Duncan). They believe that the Government have short-changed them again. [Interruption.] The hon. Member for Rutland and Melton puts his finger to his head, as if he were an idiot. I would suggest that his economics have proved to be idiotic for the past 15 years, and that it would have been common sense to calculate the cost to future generations of taxpayers of selling off the nuclear industry.

Mr. Jacques Arnold: Will the hon. Gentleman give way?

Mr. Battle: I have given way already to the hon. Gentleman, and I want to make a little progress.
Why were the shareholders not told that there were faults in the reactors? It is not that the structural faults would jeopardise safety—I accept that, despite what some have irresponsibly claimed. But they certainly would affect generating efficiency and capacity. In other words,


those reading the prospectus and buying the shares on the basis of that prospectus were sold short. Either that, or Conservative Members think that they ought to talk up shares and not give people the real facts about what they are buying. I suspect the latter to be the case.
While the Secretary of State was in the dealing room of BZW watching the shares being sold on screens, were the Ministers sitting on that crucial information that we know and they know would have jeopardised the sale even more? That is why this desperate dash for cash is the final betrayal of the ordinary shareholders whom the Government have claimed for years to support.

Mr. Duncan: Will the hon. Gentleman give way?

Mr. Battle: I have allowed the hon. Gentleman to intervene once already. I want to refer to that other acclaimed success—something to which the hon. Gentleman may wish to refer himself—the opening up of the electricity market to competition. Day by day, we learn that company after company—including GEN and Sainsbury—are refusing to pay the pool for electricity because they believe the pool system to be operated in the interests of its members, rather than its customers.
Of the 9,000 who were brought into the scheme in the industry on the last occasion the Government opened up the electricity market to commercial customers, only 5,000 had meters on the day. Coopers and Lybrand published a report subsequently describing the whole process as chaos. What do we find today? Coopers and Lybrand has published a review of the preparations for the introduction of the 1998 competitive supply market. On the likelihood of delivering that market in 1998, the review states:
A significant majority felt the likelihood to be well below 50 per cent., while a number felt that the deadline is already unachievable.
The report continued:
OFFER's contribution is still not sufficient … Furthermore, PA Consulting … who currently undertake the role of the overall programme manager on behalf of OFFER was seen by many as being 'gagged' by OFFER leading to a lack of trust and credibility in them within `the industry'.
The report continues:
By most standards, an industry-wide programme such as 1998 represents a very sizeable project and not one to be managed by loose overall coordination … it is inappropriate to allow the various parties free rein with the hope that it will all prove 'all right on the night'. In our view, it requires firm and committed programme management.
That is the view of the Government's own auditors.

Mr. Jacques Arnold: The hon. Gentleman seems to assume that the value of energy projects is exactly equal to the amount of money invested in them. Is he aware that he is making the same mistake as that made by the Labour Government that invested millions of pounds in the ground nut scheme, which proved to be worthless?

Mr. Battle: I am always glad of a historical reminder. I am tempted to divert the debate, but you would rule me out of order, Mr. Deputy Speaker. If the INMOS project had been properly supported, half of software production would be in Britain rather than elsewhere. This is a Government who know the price of everything and the value of nothing.
Competition, yes—but not simply for its own sake. We believe that it is vital to get it right. If competition in the electricity market in 1998 fails and falls flat, although the Minister for Industry and Energy will be well out of the way, it will generate a massive crisis of consumer confidence in competitive energy markets. There must be leadership from somewhere to ensure that metering, billing and the settlement of the bills and payments is sorted out in advance and not left to a simmering row between the regulator and the pool.
As the head of Yorkshire Electricity is already warning, the real test of 1998 will be its effect not only on price, as Conservative Members insist, but on our social obligations to the people who find it hardest to pay their bills. Yorkshire Electricity argues that the electricity prices charged to those least able to pay will have to rise in the new market when the new entrants take up their customers. The social obligation to share costs will disappear and companies will remove any cross-subsidies. That will lead, as we have predicted, to cherry picking. Direct debit payers will get the best deal and the cheapest energy at the expense of the poorest. Yorkshire Electricity and other regional electricity companies rightly ask who will address the effects of unbundling the costs before 1998. If price competition is to work, it must be judged by its effect on those least able to pay, whose need for energy is basic.
It is true that this is the great age of transition in energy markets. Coal, gas, electricity and nuclear energy have been privatised by the Government. There has been a shift from coal, the total fuel demand for which has fallen from 40 per cent. in 1970 to some 25 per cent. today. Gas-generated power contributes some 20 per cent. of energy generation; nuclear energy 25 per cent. There has been a dash for gas.

Mr. Duncan: There is one point about which the House is puzzled. On the sale of nuclear energy, does the hon. Gentleman think that the share price should have been lower because of what he said about the prospectus, or higher because of what he said about the asset value?

Mr. Battle: We made it clear that we would not have started to sell nuclear energy. We have emphasised that it is a bad deal for the taxpayer and the shareholder alike. [Interruption.] I am sure that shareholders and future generations will not laugh when the Government have been seen off the park because they will have to pick up the tab for the Government's irresponsibility in dealing with the industry.

Mr. Alan W. Williams: Does my hon. Friend think that it is a sensible use of taxpayer's money to spend £3 billion on building the world's largest pressurised water reactor at Sizewell and within 12 months of it coming on stream, to sell it for £1 billion and throw seven free advanced gas-cooled reactors into the bargain?

Mr. Battle: I thank my hon. Friend for his patience in spelling out the arithmetic so that a schoolchild could understand it. The problem is that the Government do not seem to be affected by the arithmetic. They are still prepared to press ahead.
There has been what has been described as the dash for gas—the move to gas as a primary generator of fuel. When we discussed the coal review, the Government said


that they wanted diverse and secure supplies of energy at competitive prices for years to come. We should take that seriously and make sense of it so that we do not end up dependent halfway through the next century on one source of fuel generation—gas—and then run out of it, and so become dependent on importing gas through the gas interconnector. That would be typical of the short-sighted cash-in mentality of this Administration.
The recent report by the 2,000 scientists who came together for the United Nations intergovernmental panel on climate change concluded that the balance of evidence suggested that global warming is a real phenomenon in many parts of the world, even though it may be masked in Britain by pollution from burning fossil fuels. We should take it seriously and plan for it in our energy and environmental strategies. It is not simply about price.
In a written answer to a question that I asked when I was first appointed to my present position, the Minister for Industry and Energy told me that we did not need to worry because there were 53 years of gas reserves in the North sea. I do not know how he arrived at that figure but some oil companies argue that it would need only two hard winters for the gas bubble, as it is called, to disappear. That would put us under pressure and we would have to import gas. If our source of gas imports was the Caspian region, it would be difficult to guarantee secure supplies because of political difficulties.
We believe in a sustainable energy future for Britain. When a previous Secretary of State for Energy, Nigel Lawson, was asked about that, he said that Britain did not need an energy policy because the market would provide one. There would be some regulation for a while and then it would wither away. We do not believe that the market alone will provide for the future energy needs of Britain. The mayhem of the past week is proving that already. We believe that we will need fair, accountable, transparent, depersonalised regulation and we will publish our detailed plans for that shortly.

Mr. Nigel Waterson: I do not want to interrupt the hon. Gentleman's flow but can he confirm that industrial gas prices, on average, have fallen by 48 per cent. in real terms since privatisation? To what does he attribute that—the tooth fairy?

Mr. Battle: I can confirm that gas prices are falling but we should compare them with the beach price. Some people believe that when the gas market is open for full competition in 1998, domestic prices could fall and commercial prices rise. The chimera of the lowest possible gas price is not what Conservative Members claim.
The target that we must aim at is not driving up the price every day for a short-term win or lose competition but to get sustainable, long-term competition in energy markets. We are committed not only to developing cleaner energy supplies, conserving energy and reducing demand but to ensuring that there is sustainable long-term competition in energy markets.
We are committed to increasing the proportion of energy generated by renewables. Lamentably, renewables such as combined heat and power schemes and photovoltaics have not been backed by the Government

and renewables contribute only 3 per cent. of our energy. We shall push harder for a clean fuel levy. We spell out that we would increase targets for cutting emissions.

Mr. Matthew Taylor: I am interested in the hon. Gentleman's comment about a clean fuel levy, because, at the weekend, the Financial Times suggested that the Labour party was considering using that levy to subsidise so-called "clean" coal. That clean coal will, however, contribute to global warming. Can the hon. Gentleman clarify what the Labour party's position is on this matter?

Mr. Battle: We would certainly examine the current levy on renewables and other options. The Government lock out the option of photovoltaics, for example. We would examine options to ensure that we have various sources of fuel, which does not mean writing off the coal industry. The tragedy is that the technology to clean up coal at the front end rather than at a later stage was developed in Britain but it was sold abroad. That technology could help to get rid of some of the noxious emissions, such as sulphur dioxide and nitrogen dioxide, and it is still a possibility.
We will consider the issue of home energy efficiency. We do not think that reducing energy demand is necessarily in conflict with the generation of energy. There should be programmes to promote energy efficiency and to build on home energy efficiency schemes. We could create 50,000 new jobs, as my right hon. Friend the Member for Sedgefield (Mr. Blair) spelt out in February. We are committed to taking action to reduce greenhouse gases, which means dealing with the issue of energy generation—as the hon. Member for Truro (Mr. Taylor) mentioned.
We need a more comprehensive approach if we are to reduce our carbon dioxide emissions. It could be argued that the Government have hit their targets only because they have closed down the manufacturing sector that created most of the problem. The Government have cut £31 million in the Budget from the home energy efficiency scheme, which has meant the loss of more than 1,000 jobs and the insulation of 2,000 fewer homes.
As the poet Valéery said:
the future is not what it used to be.
Energy markets may look very different in the future. Already supermarkets are saying that they could be energy suppliers through the use of smartcards. Already we face turmoil in takeovers and mergers in the electricity generation and supply sectors.
We say clearly that we do not want to be faced with a nuclear flotation flop. We do not want to face competition chaos, which risks causing a crisis of public confidence in even the idea of competition in energy markets. We do not want takeover or merger confusion in which the Minister disagrees with the Secretary of State over reports from the Monopolies and Mergers Commission on PowerGen and National Power. The impression that I get from the Minister for Industry and Energy is that, yes, he has been involved in all the privatisations, but he has lit the blue touch-paper and is simply walking away.
The Government lack leadership and vision. They are incapable of providing the leadership and vision to face the fact that we live in an age of transition. We face great


changes, not least in the energy sector, and the future will look different: but we should face the changes positively, and welcome their challenges.
We are prepared to work with industry to achieve the potential in the energy utility sector. We want to set our sights so that they break out of the restrictions caused by the Government's short-term thinking and to deal with the problems that our society will face half way through the next century. That is too much to expect from this short-term, short-sighted Government. Whoever replaces the Minister for Industry and Energy at the Dispatch Box will not be able to provide the leadership and the vision that we need in energy policy to take us into the next century.

The Minister for Industry and Energy (Mr. Tim Eggar): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
`congratulates the Government on its privatisation of the former state energy sector; notes that its market-based energy policies have led to lower prices and better services for consumers; and looks forward to the further benefits to consumers which will flow from the opening up of the gas and electricity markets in 1998.'.
Whoever replaces me at the Dispatch Box at some stage in the future, I am sure that he will do much better job of it than would the hon. Member for Leeds, West (Mr. Battle), whose speech was completely incoherent. He did not seem to understand most of what he talked about, and he made no attempt at all to describe the Labour party's energy policy, which does not surprise me. Looking at the motion, in a flash I was transported back to the old days of old Labour—back to the 1970s, and to the days when no speech from a Minister in the then Labour Government was complete without making reference to an energy strategy and no paragraph was complete without paying obeisance to an energy plan. Those features can still be found in the motion. Let us go through it.
According to the motion, the hon. Member for Leeds, West and his advisers should decide how much British Energy is really worth. For Labour today, it is a case not only of "Whitehall knows best" but of "Short money advisers know best". There is no role for the market. When my hon. Friend the Member for Rutland and Melton (Mr. Duncan) asked the obvious question, how a deal can be bad for both the shareholder and the taxpayer, the hon. Member for Leeds, West seemed to be totally incapable of understanding the absurdity of his statement. The Opposition motion seems to state that the Government should restructure the electricity industry. According to Labour, the market should of course have no role.
Further on in the motion there is a complaint about coal pits closing. But what is the Labour party's policy on coal? Will it or will it not, if it were to get into power, renationalise the coal industry? We know very well what the right hon. Member for Livingston (Mr. Cook) said about it. He was quite clear about it and said:
I should be astonished if our plans to rescue the coal industry after the next election did not involve public ownership.
That well-known friend of the right hon. Gentleman, the hon. Member for Clackmannan (Mr. O'Neill), was even more precise later in the debate. He said:
When Labour returns to power … we shall restore it"—
the coal industry—

to public ownership".—[Official Report, 23 March 1994; Vol. 240, c. 313–84]
That is a quite clear and unequivocal commitment—one that would really warm the heart of the hon. Member for Bolsover (Mr. Skinner).
We have heard not a word about the Labour party's policy on coal. I ask the hon. Member for Leeds, West now to tell us—I shall willingly give way to him—whether the Labour party will or will not renationalise the coal industry.

Mr. Dennis Skinner: Will the Minister give way?

Mr. Eggar: I am always willing to allow the hon. Gentleman to speak for the Labour party, because he is its real core. The hon. Member for Leeds, West does not have the guts to stand up for anything.

Mr. Skinner: The Minister has taken my name in vain, because he said that I would agree with the statement that he just made. Let me put him straight about coal. The Government destroyed the coal mining industry. There are now no pits left in my constituency. There are four or five pit villages in which the unemployment rate is more than 50 per cent. That is the tragedy of the pit closures.
I shall tell the Minister, in case he wants to repeat it, that I believe that the next Labour Government—when he has a job in the City, raking in money from the people whom he has been dealing with—should take the coal industry back into public ownership and not pay any compensation at all.

Mr. Eggar: There we have it. That intervention is interesting, because, a few years ago, the hon. Member for Bolsover would not have prefaced his remarks by saying, "I believe." He would have said, "The Labour Government, if they come into power, will renationalise the coal industry."

Mr. Skinner: Who is an idiot now?

Mr. Eggar: I think that it is the hon. Member for Leeds, West, because he is squirming. He has discovered what all previous Labour energy spokesmen have discovered: they cannot make a single pronouncement, because they are frightened of the hon. Member for Bolsover and what he might do to them. They are concerned about making any commitment at all.
Let us go on and examine what the motion says. According to the Labour party, it is up to the Government to intervene to fix coal contracts and to impose changes on gas take-or-pay contracts. There is no role for the market there, only central direction by the Government.
To cap it all, the motion then says that we are not taking the lead in introducing competition in electricity and gas. Yet the Labour party opposed the Electricity Act 1989, which introduced competition in both the industrial and domestic markets, and the Labour party voted against the Gas Act 1995, which introduced competition for domestic gas consumers. So to accuse us of lacking leadership in introducing competition in electricity and gas is inaccurate humbug.

Ms Joan Walley: Will the Minister give way?

Mr. Eggar: No, I shall not give way for the moment.
I wish to deal seriously with the points made by the hon. Member for Leeds, West. Although he did not have the guts to do so from the Dispatch Box, during the past two or three hours he has been running from television studio to television studio and from radio station to radio station saying that he has a leaked document that shows that British Energy deceived shareholders. That is a serious accusation to make. It is significant that he did not repeat that accusation from the Dispatch Box. I wish to go through the chronology of what actually happened.

Mr. Battle: The Minister will recall the chronology that I read out: it was from that document. There is no problem about that.

Mr. Eggar: The hon. Gentleman did indeed read something out from a document. The problem is that the document is from a company that competes with British Energy; so he has been going around claiming that British Energy has been deceiving shareholders, basing his allegation on a document that comes from a competitor of British Energy.

Mr. Battle: It is not a competitor.

Mr. Eggar: The hon. Gentleman says that it is not a competitor of British Energy. I know that he is ignorant about the energy sector, but he seems to be unaware that Magnox is separate from British Energy. We have just floated British Energy, not Magnox, on the stock exchange. The Government continue to own Magnox, and it is therefore a competitor of British Energy.

Mr. Battle: Will the Minister give way?

Mr. Eggar: Yes, have a go.

Mr. Battle: If the Minister reads through the document, he will see that it is the minutes of the meeting attended by Magnox—that is the heading on the paper—Nuclear Electric, Scottish Nuclear, British Energy and various British Energy advisers.

Mr. Eggar: I shall go through the whole chronology, and the hon. Gentleman will find out the true position. I am treating this issue with the seriousness that it deserves, because the hon. Gentleman has been making a serious accusation outside the House rather than from the Dispatch Box.
The British Energy prospectus sets out clearly and exhaustively the range of issues that prospective investors should consider. It covers British Energy's continuing programme of work to deal with the reheat cracking in welds, which led to last week's closures. Had the hon. Gentleman bothered to look at the prospectus, he would have found the details on page 65, and further warnings about this and other technical issues on pages 67 and 109. Far from misleading people, British Energy went out of its way to deal openly with those difficult technical issues.

Mr. Alan W. Williams: Will the Minister give way?

Mr. Eggar: I promise the hon. Gentleman that I will give way to him, but will he first listen to my statement? I am trying to put clearly on the record what actually happened. It will benefit the House if I am free to do that.

While carrying out planned testing of reheater pipes during the Hinkley Point B statutory outage—which was scheduled to last for two months from 7 June—the existence of a crack in the pipe was confirmed on 1 July. A further test was carried out on 2 July. On 3 July, Nuclear Electric Ltd., which holds the licence, decided to cut out the affected weld for detailed metallurgy tests. On 4 July, Nuclear Electric issued a press release, which reported on its monthly output figures and, in accordance with normal practice, on the progress of the statutory outages at the reactors at each of Hunterston B and Hinkley Point B. I have that press release in my hand.

Dr. Michael Clark: Will my right hon. Friend give way?

Mr. Eggar: If my hon. Friend will forgive me, I shall do so in a moment.
The press release noted that a crack in a weld had been discovered at Hinkley; that the weld would be cut out and replaced; and that steam-pipe weld inspections would be undertaken on the remaining reactors at Hinkley Point and Hunterston in due course. Accordingly, the pipe was cut out on 8 July and, on the morning of 9 July, the pipe was sent to the Berkeley laboratory for analysis. At 5.30 that evening, the initial results of the analysis, which showed the extent of the crack to be greater than expected, was passed to Nuclear Electric's director of engineering and, shortly afterwards, to the chairman, managing director, operations director and director of safety at NEL, and to the chairman of Scottish Nuclear.
At 7.15 that evening, the NEL managing director and the Scottish Nuclear chairman, in consultation with the appropriate technical, engineering and safety directors, decided to shut down immediately the remaining reactors at Hinkley Point and Hunterston for precautionary inspection of their steam-pipe welds. Controlled shutdowns commenced at 8 pm. British Energy's chairman and chief executive were subsequently informed of the position and my officials at the DTI were notified at 9 pm that evening. Ministers, including me, were told about the closures at 9 am on Wednesday 10 July.
During the morning and early afternoon of 10 July, a high-level group of executives from the British Energy group, including its chief executive, met their advisers and considered carefully the evidence from the metallurgical examination of the cracked weld and the financial consequences of the decision to close the remaining reactors for a two-week inspection so that they could issue a press release containing all the relevant information. At 3.30 pm on 10 July, they met DTI officials and privatisation advisers to advise us of their conclusions and the terms of the proposed press release, before issuing it at 5.30 pm.
I have taken some pains to explain the process at length because I want to assure the House that there is no question of anyone being misled or of information being withheld. The company acted entirely properly and it is a tribute to its stringent safety procedures that precautionary measures were taken so promptly to deal with the problem. Clearly, the timing of the closures at the two stations was earlier than originally planned, but the company did not regard the developments as representing a significant change for potential investors, so invalidating the prospectus.

Mr. Battle: This is an important matter, and I listened carefully to the Minister's outline of the programme.


The Minister will concede that Nuclear Electric is part of the group. I have in my hand issue No. 6, page 1, of "Hinkley Point News", dated Monday 1 July. It says:
During planned inspections on boiler pipeworks associated with reactor 4, a slight defect was discovered on a reheater pipe weld. This weld will now be cut out and preparations are in hand to replace it. This will either require an extension to the current outage, or a separate outage later in the year.
That was on I July, which does not quite chime in with the timetable that the Minister has just read out.

Mr. Skinner: What a scandal.

Mr. Eggar: Mr. Deputy Speaker, the existence of a crack was confirmed on 1 July. It was then—

Mr. Battle: All the employees knew about it from their newsletter.

Mr. Eggar: The hon. Gentleman says the employers knew about it.

Mr. Battle: The employees.

Mr. Eggar: The employees knew about it. It is part of the culture of British Energy that it is open in its communications with its employees and that it informs both management and employees as issues arise. I am very surprised that Opposition Members, especially the hon. Member for Barnsley, West and Penistone (Mr. Clapham), laugh at the idea of open communication with the work force.

Mr. Alan W. Williams: rose—

Ms Walley: rose—

Mr. Paddy Tipping: rose—

Mr. Eggar: I give way to the hon. Member for Carmarthen (Mr. Williams).

Mr. Williams: The Minister says that it is the culture of the nuclear industry to have a free exchange of information with its work force, and I am pleased that we are making good progress in that direction, but should it not be part of that same culture to have free communication with its potential investors and shareholders rather than to defer this announcement to one hour after the close of that share offer? Should not that announcement have been made, at the very least, earlier that day or, better still, two or three days before the close of the share offer?

Mr. Eggar: I am sorry; I did go to considerable pains, and I think that, if the hon. Gentleman reads Hansard tomorrow, he will follow through the sequence of events, which makes it very clear that the full extent of the crack was not known until the Tuesday evening, that the stations were then closed down and that, subsequently, the chief executive and chairman of British Energy were informed.
The chief executive and chairman met on the Wednesday, the day in which the retail offer closed, to discuss with their financial advisers the financial implications of the decision to shut down the two stations.

They did that, because clearly there was an issue; they were in the process of floating the company. They decided, in the light of all the advice that they had had, that it was not an issue that needed more than the issuance of a press release. As I said, that press release came forward at 5.30 that afternoon.
I can assure the hon. Gentleman that there was no attempt to deceive, that absolutely—[Interruption.] The hon. Member for Leeds, West laughs.

Mr. Battle:: I am not laughing.

Mr. Eggar: Is the hon. Gentleman prepared to say from the Dispatch Box, despite what I have told him about the sequence of events, that there was a deliberate attempt to deceive?

Mr. Skinner: Yes.

Mr. Eggar: Obviously not, Mr. Deputy Speaker.

Mr. Battle: I followed the details through as the Minister related them, but they still conflict with the newsletter and the information that was given to the shareholders. He told us to read the prospectus; I notice that he did not read out the relevant part, because it does not spell it out in the prospectus.

Mr. Eggar: It is sad that, despite a very detailed, explicit, carefully weighed statement from the Dispatch Box, the hon. Gentleman is still prepared, speaking as a supposedly responsible Opposition Front-Bench spokesman, to wave at me a leaked document from a competitor company.

Mr. Battle: "Hinkley Point News".

Mr. Eggar: I have to say to the hon. Gentleman that it is, to say the least, unfortunate that a Front-Bench spokesman in the House behaves in that way.

Ms Walley: rose—

Mr. Alan W. Williams: rose—

Mr. Michael Clapham: rose—

Dr. Michael Clark: rose—

Mr. Eggar: I want to get on with the debate. I will, however, give way to my hon. Friend the Member for Rochford (Dr. Clark).

Dr. Clark: Does my right hon. Friend agree that nuclear power stations—indeed, any power station—will from time to time require shutdowns, sometimes scheduled, sometimes not? Despite all this, the power stations about which we are talking at present have increased their load factor in the past five or six years from 52 to 71 per cent. Does that not show the value that the taxpayers are getting when they buy into British Energy?

Mr. Eggar: My hon. Friend is right. Anyone who knows the nuclear industry, who knows the improvement


in the performance of the stations and the dramatic change that has been achieved during the past four or five years, knows that that is a tribute to the skills of the employees of British Energy and to the management of British Energy.

Mr. Alan W. Williams: Will the Minister give way on that point?

Mr. Clapham: rose—

Ms Walley: rose—

Mr. Eggar: I will not give way. I want now—

Ms Walley: He is afraid of Labour intervening.

Mr. Eggar: Many accusations could be made, but I am afraid that that one by the hon. Lady is not one that would have much credibility. I have spent disproportionate time on this issue, because it was raised by the hon. Member for Leeds, West. I now want to try to deal with the wider issues raised by the motion. 
The debate is entitled "Energy Policy". The hon. Member for Leeds, West made it clear that for him energy policy means centralised command-style planning—the planning that gave us all the energy mistakes of the 1970s.
Conservative Members have consistently applied an energy policy for several years. We do not believe that direct control or ownership of the energy industries is necessary or desirable. We believe that what is needed is competition in open markets, working within a stable framework of law and of regulation. That is how we think we can best promote our energy objectives of providing secure, diverse and sustainable energy supplies in the form that people and businesses want and at competitive prices.
For much of the past 50 years, most of the energy sector was in the grip of state-owned monopolies formed in the splurge of Labour nationalisation after the last war. The lessons that we have learnt since then, at some cost to us all and to the national economy, are as follows. Governments are no good at running a business from day to day. Mistakes produced by a central planning system tend to be large and expensive. Innovation and efficiency are stifled in a monopoly system, as customers have no choice or alternative.
Over the years, nationalised industries' operational efficiency was subordinated to whatever current political imperatives held sway. At one time, prices and incomes policy held electricity prices down; the next year, International Monetary Fund pressures forced them up. That was the reality of state ownership of the nationalised industries and state control of dirigiste energy policy.
The Conservative Government determined that we do a lot about this. We determined that the energy businesses should be run as businesses, not arms of the state. We privatised the nationalised industries. We set up regulatory regimes to encourage the development of competition and to control prices where competition did not exist.
All that has been very successful. Let me take some examples. In the industrial electricity market for supplies over 1 MW, more than half the consumers have switched to a supplier other than the local regional electricity company, and more than one third of the smaller industrial consumers of supplies over 100 kW have switched suppliers. The result has been clear—real industrial electricity prices are the lowest since records began.
In the industrial gas market, as has been said, very many firms have switched to the new entrants. The result is clear: real industrial prices are about half those at privatisation 10 years ago. Despite the fact that full competition is not yet here, domestic consumers have benefited considerably. Real annual average domestic electricity prices are the lowest since 1974. Coke and coal prices are the lowest in real terms since 1975.
In 1986, it used to take the average earner about 77 hours' work to pay for his year's gas bill. It now takes that average earner about 55 hours to pay for the average gas bill. The prospects for domestic gas consumers under full competition appear even brighter. The average earner in the south-west trial area only has to work about 44 hours to pay for his year's gas supply.
Strong regulation and competition are not only about price; they are about higher standards, better service and stronger customer orientation. Social responsibilities have not been forgotten—since privatisation, gas disconnections have fallen by two thirds and electricity disconnections have fallen by a staggering 98 per cent. The system is working. Consumers are already receiving significant benefits from the changes that we have made, and there will be even more benefits in the future. Companies have been encouraged to innovate, to become more efficient and to become more effective. The environment has also benefited because of the reduction in the pollution that is emitted from the more advanced electricity-generating sets. Our market-based policies are working. We have brought about a radical and revolutionary change in the way in which the energy sector works, to the benefit of all.

Mr. Tipping: The Minister has referred to things that have come down, but will he also refer to things that have gone up, such as complaints against British Gas? Has not the consumer lost out in many ways?

Mr. Eggar: The consumer has gained from the reduction in real gas prices, which have fallen by almost one quarter over the past 10 years. I have already referred to figures that show that the average earner has to work 22 hours less each year to pay for his gas than was the case at the time of privatisation. That is a significant benefit, and the hon. Gentleman will recognise the benefit that competition has introduced into the south-west.
The hon. Member for Leeds, West did not make a statement about energy policy, but there was something else: a dog that did not bark. We know that one area of Labour policy exists: the windfall tax, which was not mentioned by the hon. Gentleman. I suspect that he did not mention the windfall tax because, as is well known, the Labour Front-Bench spokesmen for industry and


energy do not support it. as was made clear by the hon. Member for Pontypridd (Dr. Howells) on the "Today" programme.

Mr. Battle: If the Minister read the newspapers, he would know that we have gathered together in support of the windfall tax and that we have made it plain that we will impose it.

Mr. Eggar: We have made an advance: we now know that at least one member of the Labour party's industry and energy team supports the windfall tax. I ask the hon. Member for Leeds, West to answer a few questions. Will he confirm whether the windfall tax will be retrospective? There is no answer from the hon. Gentleman—he has failed test No. 1. Will the hon. Gentleman say which energy companies will be hit by the tax? He has not answered—he has failed test No. 2. Will he say how much the windfall tax would be? Again, he has not answered—he has failed test No. 3. Will he say how long the windfall tax will last? Again, there is no answer—he has failed test No. 4. I am sure that the hon. Gentleman can confirm how this windfall tax money will be spent.

Mr. Alan W. Williams: Jobs.

Mr. Eggar: Jobs? That is probably another commitment. The Labour party has committed itself to 11 ways of spending the tax, and I am willing to take additions to the list. Will the hon. Gentleman confirm whether he still intends to finance £75 a week payments to the unemployed from the windfall tax—yes or no? Again, no answer. Is the tax still earmarked for a new environmental task force?

Mr. Battle: The Minister should try reading the newspapers.

Mr. Eggar: I should read the newspapers? In other words, is it still intended that the windfall tax will be used to pay a fixed sum to people taking jobs in non-profit organisations`' Is the windfall tax going to pay for removing lead piping from the water systems? Will the windfall tax pay for the changes in the VAT thresholds and the capped allowances? Labour Front Benchers have made 11 commitments on how they will spend the windfall tax, but there is no explanation of how they will raise it, who at will be raised from, what the rate will be and how long it will last.
In "The Road to the Manifesto", the Labour party stresses how important stability is for industry—it is in lights. However, the hon. Member for Leeds, West cannot even answer my simple questions about the windfall tax.

Mr. Battle: At least we have made it plain that we will introduce a windfall tax. We did not go to the electorate and promise that we would not put VAT on fuel and then put VAT on fuel once we were elected.

Mr. Eggar: The hon. Gentleman should be better briefed or stay seated. The Government have pursued a constant and consistent energy policy since 1979. The policy has delivered enormous benefits to customers, led to dramatic reductions in the price of industrial gas and domestic gas, and to the reduction in the price of industrial electricity. Domestic electricity consumers have

received more than £50-worth of free electricity already this year, with further reductions in the pipeline and 6 per cent. in October. Meanwhile, the standard of service is up, and gas and electricity disconnections are down.
The Government have introduced an energy policy that has benefited the environment and played a critical role in enabling us to meet our climate change commitments. Over the past 10 years, we have introduced competition and change into the energy sector—change that has meant more choice, more efficiency and better technology for consumers and producers alike. The Government have transformed the energy sector, as they have transformed industrial relations. That transformation has been good for consumers, for competitiveness and for the country. I am proud to have played a major part in that transformation over the past four years. I urge the House to reject the Labour party motion and to accept the Gvernment amendment.

Mr. Michael Clapham: I take the Minister back to 1945, a period to which he referred as a splurge of activity in nationalising the industries. He will be aware that in 1947 the coal industry was in such a state of deterioration that it took state backing to regenerate it. The electricity supply industry was nationalised in 1948 and the gas industry was nationalised in 1949—all the legs of the energy industry were brought together in a co-ordinated and efficient way.
Over that 35-year period, the United Kingdom's energy policy was based on a framework of publicly owned and publicly accountable industries—throughout the 1960s, British competitiveness was able to meet competitiveness anywhere in the world. It is fair to say—I am sure that the Minister has checked his figures for the 1960s—that labour productivity in the nationalised United Kingdom electricity industry was second only to Japan. In other words, the United Kingdom electricity industry, under a nationalised system, delivered electricity efficiently and supported British industry.

Mr. Peter Hardy: Does my hon. Friend agree that, if the electricity industry had not been nationalised in the late 1940s and allowed to operate nationally, many rural areas of England would not have received electric power for at least another 20 years?

Mr. Clapham: I agree with my hon. Friend. The condition of the electricity, gas and coal industries was so bad in the late 1940s—they had deteriorated during the war years—that they needed state backing in order to provide power to the consumer. There is no doubt that, if it were not for nationalisation, rural areas would have had to wait many years before they received power supplies.
The main changes over that 35-year period occurred in the energy balance. Coal was gradually displaced by oil, nuclear energy and later gas. Some pundits—perhaps the Minister will agree with their depiction—describe energy policy in those years as nationalisation followed by pragmatic regulation. It is not fair or correct to say that there was no regulation during that 35-year period: there was pragmatic regulation. That is how many academics, to whose research the Minister refers, describe the 35 years of nationalisation.
There was no semblance of energy policy in the 1980s—it disappeared altogether. It became a nostrum that privatisation and the market would allocate energy resources efficiently. That led to the ultimate privatisation—as Lord Parkinson referred to it—of electricity in 1990 and to the privatisation of the coal industry.
The privatisation of electricity left three main generators: National Power, PowerGen and Nuclear Electric. Twelve regional electricity companies were responsible for supplying electricity. Nuclear Electric remained within the public sector and contributed about 25 per cent. to 26 per cent. of our electricity needs. Nuclear Electric was not privatised in the 1990 package as the market would not take it because of the risks involved—we are talking about £31 billion of undiscounted liabilities.
Consequently, in 1990 it was decided that it would be better to leave nuclear electricity in the public sector. It was recognised that the income stream that would result from the company's remaining in the public sector could be used to deal with the massive liabilities that had been left behind. Those liabilities, in part, remain in the public sector as the newer power stations have been privatised.
The privatisation of the electricity industry led to the colliery closure programme of 1992–when the then President of the Board of Trade, now the Deputy Prime Minister, threw out all the recommendations in the Trade and Industry Committee report "British Energy Policy and the Market for Coal". Following his rejection of those recommendations, privatisation of the coal industry was inevitable. After write-downs and write-offs, the rump of the coal industry was sold to RJB Mining for a knock-down price. About 30 deep mines from the original package are still operating and they produce between 34 million and 36 million tonnes of coal.

Dr. Michael Clark: The hon. Gentleman said that the "rump of the coal industry" was sold to RJB at a knock-down price. Does he recall that at the time of the sale, everyone—particularly the financial papers—said that RJB had paid about twice as much as it should, that it would never be able to repay the money and that it would be driven into liquidation? Of course, RJB went on to make a profit. However, it did not seem a knock-down price at the time—certainly not in the view of the analysts.

Mr. Clapham: It was a knock-down price if one considers the way in which British Coal had previously written off the debt and dealt with the liabilities, so that anyone who took over the mining industry was bound to make a profit in the first few years. I believe that RJB bought the mining industry at a knock-down price and, in hindsight, most analysts would agree with me.
The coal industry currently produces 34 million to 36 million tonnes of coal. Other companies—such as Coal Investments Ltd., which recently went into liquidation—operate deep mines. It is unlikely that any of the pits that have closed will open again. I ask the Minister to tell us whether assistance will be available to companies that

take on the contract to recover plant and machinery from underground. Perhaps he can answer that question when he winds up the debate.

Mr. Tipping: Perhaps the Minister will tell us also what discussions he has had with the Coal Authority. The liability arising from the liquidation of Coal Investments was transferred from the private sector to the public sector and the Coal Authority. Will the Minister confirm whether that liability will amount to about £5 million?

Mr. Clapham: I am grateful to my hon. Friend for prompting me. The Minister may refer to that matter when he winds up. I have put several questions to him but, as yet, he has not confirmed whether the Government will provide assistance to enable companies to retrieve plant and machinery from underground.
In addition to taking over the deep mines, RJB took control of most opencast sites and potential opencast sites. Those sites stretch throughout England. Opencast production currently runs at about 17 million tonnes, which is about half of all deep mine production. It is the most opencast mining that has ever occurred in this country. Some agencies, such as the Coalfield Communities Campaign, argue that we do not need that much opencast mining—particularly if it is required only for technical reasons.
I ask the Minister to consider that point when he receives new opencast mining applications. He will be aware that British Coal is now selling land not only to those who have farmed it for years but to the highest bidder. It is attracting opencast miners—and that is its intention. British Coal is putting out its land to tender in the hope that companies will buy the land for opencast mining. Some of the most beautiful countryside in Yorkshire is now under threat.
For example, "For Sale" signs have gone up on a piece of land in a beautiful valley between Hood Green and Silkstone common in my constituency. It is quite clear that the owner wishes to attract opencast companies. That site is situated in one of the most beautiful parts of Yorkshire. It has high scenic value and it would be a tragedy for the community if the land were used for opencast mining. I invite the Minister to visit that site so that he can see what is at stake as a result of British Coal's policy of offering its land to the highest bidder. The Minister may wish to take up that invitation, and come to see the land. If he does, we may well have his support when it comes to defending the site against the opencast mining companies.
It is clear that safety in the deep mines has deteriorated radically. Figures for the first year of private ownership, produced by the Health and Safety Executive, show that the number of fatalities and major accidents has increased dramatically. I recall that, during our previous debate on this subject, the Minister said that there was no evidence of an increase in the number of major accidents, but the HSE's figures make it clear that that is not the case.
Let us take the HSE's comparison of the figures for 1994–5 with those for 1995–96. According to the HSE, there has been an alarming increase in the number of major injuries, from 135 to 159, while the number of fatalities has risen from two to five. I suggest to the Minister that that evidence clearly shows that British deep coal mines are not as safe as they were following


privatisation. The alarming increase in the number of injuries and fatalities can be explained by deregulation, by the fact that miners must now work for much longer hours, by increased use of contract labour and by the downgrading of the deputies' role.
The Minister will recall that the Deputy Prime Minister, when he was at the Department of Trade and Industry, insisted that miners would never be put at risk. Perhaps, bearing that in mind, the Minister will tell us what he will do to ensure that the high safety standards that obtained in British mines under nationalisation are reinstated in the next year.
The current coal contracts are due to be renegotiated in 1998. At present, the collieries provide some 30 million tonnes; last year RJB Mining supplemented that from stock. I understand that the generators took some 56 million tonnes of coal. As the contracts come up for renegotiation, the potential of the entire coal industry will clearly depend on their being long term. As we know, there has been little investment. The Minister did not mention that, since electricity privatisation, there has been no investment in research and development relating to clean coal technology. We now need a balance in our energy policy, but we do not have the means to burn coal efficiently and in an environmentally friendly way.
Perhaps, when he replies to the debate, the Minister will tell us whether any assistance will be given to such research and development, whether he is prepared to reinstate the investment programmes and whether he is prepared to be helpful to the coal companies in the renegotiation of contracts. Does he, for example, foresee the maintaining of the contracts at 30 million tonnes? Does he expect them to be of a shorter duration? If they are of shorter duration, that will have a considerable impact on mining communities, and it would help those communities to know what is in the Minister's mind.
My hon. Friend the Member for Leeds, West (Mr. Battle) spoke at length about nuclear privatisation. The report of the Select Committee on Trade and Industry on the intended flotation of British Energy, produced in February—which urged caution on the Government—has clearly not been taken into consideration. As the Minister will know, the report emphasised that the scope of the segregated fund did not seem sufficient to cover the liabilities.
Since the publication of that report, two energy economists have produced a further report. I know that the Minister has read about that material; he will also know of the open letter to him from the two energy economists, published in The Guardian, which made it clear that they stood by their figures. Those figures suggest that privatisation of the seven advanced gas-cooled reactors and the one pressurised water reactor has left up to £6 billion-worth of liabilities in the public sector. If 'we add that to the £17 billion-worth of liabilities that are tied up with the Magnox stations, it seems that the public sector has been lumbered with up to £24 billion-worth of liabilities. As my hon. Friend the Member for Leeds, West pointed out, that is certainly not a good deal for the taxpayer.
It is clear that the company could never achieve the performances that Barclays de Zoete Wedd advised the Government that it could. As the Minister will know, BZW clearly said that the advanced gas-cooled reactors would be able to reach 82.5 per cent. of their performance

over the year. In fact, they have never been able to achieve more than 74 per cent., and I suggest to the Minister that even that has caused problems with welds that have resulted in the closure of the reactors at Hinkley Point B and Hunterston. The AGRs have been pushed to their limits. If that is true, they will never reach the levels that the Government told us that they would, and, consequently, the industry will not be able to generate the profits that were anticipated. This is not a good sale for the shareholder either.
The closure of the Department of Energy following the 1992 election clearly signified the end of any United Kingdom energy policy as far as the present Government were concerned, and heralded its replacement by an industry-based regulatory authority. The Minister should pay attention to what I am about to say. He chided some of my hon. Friends for the way in which they referred to what the Labour party would do, but it will be left to Labour to harness the utilities for a collective purpose. I suggest to the Minister that, in doing that, we shall ensure that public ownership is back on the agenda within 10 years.

Dr. Michael Clark: It is a pleasure to follow the hon. Member for Barnsley, West and Penistone (Mr. Clapham). We served together on the Select Committee on Trade and Industry following the demise of the Energy Select Committee, to which he referred.
I support the amendment in the name of the Prime Minister. Energy has been a key feature of this Conservative Government's policies since 1979. No Government had a realistic energy policy before that, although attempts were made to establish energy policies of sorts. Under the 1974–79 Labour Government, there were attempts to introduce such a policy, but in the context of a command economy; never before have we had an energy policy in the context of a supply economy.
Energy is a commodity, but it is not like other commodities in that it is not tangible. In other words, it cannot be felt or seen. At the same time, it can be measured. The tangible commodity is the fuel that generates energy, so to a large extent energy policy has to be determined by fuels. It is therefore important that we have fuels available at realistic prices. It is also necessary, if we are to build power stations, that we take into account the cost of capital for such investment. That, too, will have a bearing on energy policy.
We must ensure reliability of power supply, which there has not always been. Above all, we must ensure—the Government have succeeded on this score—that we take into account consumer satisfaction and industrial competitiveness for the well-being of our country. On all these scores, the Government have succeeded, and in all instances the points obtained have been high.
From the outset, the Government declared that their policy would be one of diversification and market forces. The then Minister who espoused that policy more than any other was Lord Wakeham, as he now is. He constantly stressed the need for diversification and market forces. I remember arguing with him on some occasions and asserting that the latter, market forces, would destroy the former. I argued that diversification would go as market forces took over.
I accept, however, that that has not been the outcome. Market forces have obliged other energy sources and other fuels to become more competitive. That has


happened in the short term, and as a result, there have been price reductions. There has been a downward spiral of prices as competition has come into play. Fuels have decreased in price, as has energy, and consumers, whether domestic or industrial, have benefited.
We want to see the liberalisation of markets, and those markets should be looked after by regulators who are promoting competition and acting as a proxy for competition when fuel competition is not available for the time being. The Government have ensured that that has happened.
The greatest step forward on the road towards a liberalised, competitive, consumer-oriented energy policy has been the Government's privatisation programme. It was thought by some—I dare say that the hon. Member for Barnsley, West and Penistone took the view—that, in the state sector, there was greater security of energy supply. I do not criticise the hon. Gentleman for taking that approach. Sometimes, however, it was a false sense of security. Frequently, the monoliths in the state sector were inefficient, bureaucratic and susceptible to the whims of union power. It seemed at times that they were run more for the benefit of employees than for consumers.
The Government privatisation programme took place in five stages. We saw the first stage in the early 1980s with the privatisation of British Petroleum, Britoil and Enterprise Oil between 1981 and 1984. That set the tone, and paved the way for future privatisations. The early privatisations ensured that the oil industry, both upstream and downstream, exploration and retail, was in the private sector.
Oil was important, of course, for transportation, for heating and for chemical feedstock. Let us never forget that oil should be reserved for chemical feedstock. It is not a fuel for burning. It is a feedstock, as it were, for a complex and highly sophisticated chemical industry.

Mr. Jack Thompson: Does the hon. Gentleman accept that the use of gas for power generation is also a waste of a valuable fuel? Gas should be retained for the domestic and commercial markets, not used for the generation of electricity.

Dr. Clark: I concede that gas is a premium fuel. Indeed, it could be said to be more of a premium fuel than oil. We can use gas for chemical feedstock and for sophisticated forms of transportation where oil could not be used. If we went down that path for any distance, we could say that coal, too, is a chemical and should be used as a chemical rather than as fuel.
The hon. Gentleman tempts me to go down the path that leads to the conclusion that the only fuel that we should be using is nuclear energy. I shall leave that argument for the time being. That, however, is the path down which the hon. Gentleman takes me if we are to consider all hydrocarbons as chemicals rather than as fuels for burning.
When privatisations took place—this is apart from feedstock and transportation being primary forms of usage—oil was being burned in our power stations, as was coal. Those were the two main sources of fuel for power generation for industry, as well as for home and industrial heating.
The next form of privatisation took place in 1986 with British Gas. We privatised it as one entity. Some criticised the process for introducing a privatised monopoly, and I suppose that in some ways that is what it was. It was, however, a big and bold privatisation, the like of which had not been attempted by any other Government, in any country, let alone in the United Kingdom. If there were some aspects of that privatisation to which we wished to return, perhaps that was not too surprising bearing in mind when privatisation took place and how large the endeavour was.
Prices decreased dramatically as a result of privatisation. As we have already heard from my right hon. Friend the Minister and others, since privatisation, industrial gas prices have decreased by 48 per cent. Domestic gas prices, notwithstanding the imposition of value added tax, have decreased by 18 to 19 per cent. In real terms, gas prices have returned to the prices of 1970, 26 years ago. We have seen efficiency improvements in British Gas. Indeed, British Gas became a world-class international gas company. It was able to export its expertise and to gain contracts for international consultancy.
As it was an early privatisation, there was clearly a need for regulatory readjustment. Accordingly, the Gas Act 1995 was enacted. That measure will ensure that there will be domestic choice for gas by 1998. Test trials are already being conducted in the south-west. Consumer choice for gas supply has brought about radical change to British Gas. I accept that it has been painful for British Gas employees, and difficult for British Gas shareholders, but it has been beneficial to consumers, many of whom are also employees and shareholders.

Mr. John Home Robertson: The hon. Gentleman is talking about choice for gas consumers. In the coldest days of the year, during the beginning of January, about 10,000 of my constituents found that their gas supply had failed because of the inadequacy of the distribution system in the area. Is the hon. Gentleman sure and satisfied that there will be security of supply in the brave new privatised world he is describing?

Dr. Clark: It is always difficult to give a cast-iron 100 per cent. guarantee. I doubt very much, however, whether the failure in the hon. Gentleman's constituency, which we all regret, was anything to do with the privatisation of British Gas. If there is competition and two or three companies are supplying gas, there is a greater chance of gas being available.

Mr. Home Robertson: The distribution system failed.

Dr. Clark: We know that there is only one distribution network. If it was that which had failed, it would have failed whether it was a private sector company, public sector company, privatised or nationalised competition. I think that the failure to which the hon. Gentleman refers was probably incidental and nothing to do with privatisation.

Mr. Richard Caborn: Will the hon. Gentleman give way?

Dr. Clark: I will continue if I may. I may give way in a moment.
The third aspect of privatisation, and perhaps the most complex of all, was in 1990–91, when we privatised the regional electricity companies and generators. It was very complex, but a great success. Again, consumers benefited: industrial electricity prices are down by 10.5 per cent., and domestic prices are down by 8 per cent., in addition to the £50 rebate that householders received from the sale of National Grid. It is anticipated that there will be another fall of 20 per cent. per bill when the fossil fuel levy is reduced later this year or the next.
At the same time as that privatisation, the Government introduced the non-fossil fuel obligation, which began to encourage benign energy sources—alternative energy sources—and we saw the greatest leap forward ever in alternative energy supply. We were able to make a contribution to the environment by reducing carbon dioxide, and as a result of the prices that were available for people generating electricity from alternative sources, research and development was encouraged for benign and renewable energy sources.

Dr. Robert Spink: Does my hon. Friend agree that the liberalisation of the energy market and the privatisations have gone hand in hand with a greater social responsibility and performance in terms of environmental care and control across all the energy companies?

Dr. Clark: My hon. Friend is quite right, because, in the prospectuses for all the privatisations, care was given to environmental matters far exceeding any care that had been given to them before privatisation and before a portfolio and specification were necessary.
Before I leave electricity, I must say one thing to the Minister, to which I hope he will reply. It is not right that we should have a pool system when bidding for electricity, whereby everyone is paid the price that is paid to the highest bid accepted. I give him an over-the-top example.
Let us suppose that, on a cold winter's day, we are desperately short of electricity, and some chap in Castle Point is pedalling his bicycle to generate electricity for the grid. We are so short of electricity that we take the electricity from him and pay him 35p a unit for it, even though the going rate at that time may be only 2.8p a unit, but we have to take it because he is not prepared to generate electricity for anything less than 35p.
Just because we pay 35p for that half-hour period, why should we pay 35p to every single generator in the country, whether the electricity comes from oil. gas or nuclear? I have made an exaggeration to prove my point, but my point is still valid. Every generator should not be paid the equivalent of the highest bid accepted. Payment should be according to the bids made.
The fourth privatisation was coal. Major change had been brought about by the liberalisation of energy. We all know that, at the end of the privatisation process, the coal industry suffered. I do not deny that. Hon. Members will know that I was as assiduous as most in trying to prevent the decline of the coal industry, but it happened. To some extent, it happened because more gas is being used in electricity generation, but there has been a long-term effect on our coalfields and many coal pits have closed and may never reopen.
The good news, however, is that, where the industry has been privatised, whether it be RJB Mining or Celtic Energy, the downsizing and the privatisation have brought about an

upsurge in efficiency in the coal industry, in morale and productivity. There has been a great improvement in employee participation, and the increase in competitiveness is quite spectacular. Those examples can be seen in both RJB Mining and Celtic Energy. I was pleased to be able to meet representatives of both those companies last week and learn how well they are getting on.

Mr. Clapham: The hon. Gentleman obviously did not discuss the situation with the men who work at the coal face for RJB Mining or Celtic Energy. Does he agree that, of all the pits that have been privatised, the colliery with the best industrial relations and, indeed, the best and most efficient way of using its human resource, is Tower colliery, which was an employee buy-out?

Dr. Clark: I am delighted with the results from Tower colliery. As the hon. Gentleman has said, it is the only example of an employee buy-out of a colliery in this country. It has been extremely profitable, as indeed have other pits owned by bigger companies. It is just as much a delight to me, my hon. Friends and the Government as it is to the hon. Gentleman that it has been a success. I hope that it will be successful for a long time. Many of its employees staked—I shall not say "gambled", as it was not a gamble—a large amount of personal money on it, and it is a delight that it has succeeded and that they have seen a return on their investment.
In December 1988, my hon. Friend the Member for North Bedfordshire (Sir T. Skeet), who is not present this evening, and I spoke to urge a delay in the privatisation of the nuclear industry, as we thought then that it was not ready for it. The Government thought otherwise, although, a year or so later, my noble Friend Lord Wakeham pulled the nuclear industry out of the privatisation programme. I think that, with the load factor improvements to which we have referred, with public confidence in nuclear energy and with the reprocessing that is available for nuclear fuel, it is the right time to privatise British Energy.
I hope that British Energy in the private sector will remember its core commitment to nuclear energy. Although it will be tempted to go down other paths, it should remember its expertise and its roots. It should be the source of nuclear power for the future, not just nuclear power for the past. I hope that it will remember that. I am sure that it will be profitable and that it will give a good return to shareholders.
I conclude by congratulating the Government on their creative energy policy, on their brave decisions on privatisation of the past 17 years, on the care that they have taken to look after consumers, and on their sheer determination to benefit not only the energy industry but the whole of British industry by ensuring cheap and competitive energy.

Mr. Matthew Taylor: I hope that the House is in no doubt about at least one point—that energy policy is important. Indeed, the present lack of a coherent energy policy aptly symbolises a Government who have long since lost their way.
A strategic and comprehensive energy policy is essential if we are successfully to contain global warming by reducing the environmental impact of energy use. It is essential if we are to end the scandal of fuel poverty that


affects 8 million families in this country and ensure adequate supplies of energy for future generations. Let me briefly review what we have instead of such a policy.
We have a Government who choose to sell the profitable parts of nuclear energy for less than the cost of building Sizewell B, while leaving the taxpayer to pick up the bill—a bill that will be paid by future generations many decades hence. The recent news that, just before its flotation, British Energy shut down Hunterston B and Hinkley Point B but did not release that information until after the flotation, has sparked a stock exchange inquiry.
We have always said—I have spelt out our position in detail in two debates, and do not plan to do so again now—that the sell-off was bad for the taxpayer. It now appears that small shareholders have also paid the price. Only the Government are laughing all the way to the bank, with another £1.4 billion in their coffers for pre-election tax cut bribes at the expense of saddling the taxpayer with huge long-term liabilities and shareholders with at least short-term liabilities.
This is a Government who have pushed privatisation on the gas and electricity industries but ignored the problems of fuel poverty and energy inefficiency; a Government with no interest in or understanding of the problems that their approach to every sector of the energy industry has wrought.
I might add that the Government have not even recognised the countervailing impact on their usual regional development policies of the increasing encroachment of regional pricing differentials. That means—you know this as well as I do, Madam Deputy Speaker—that, in the south-west, in addition to the highest water bills in the country, we shall soon face the highest electricity and gas bills, too. That impacts not only on individuals but on business and on the Government's so-called regional policy, but the Government seem wholly unable to co-ordinate their policy position.
The lack of any strategy is evident in the Government's amendment to the Labour party's motion. For example, the environmental problems associated with energy use are not even touched on. The Secretary of State for the Environment is fond of saying that his party cares about the environment; unfortunately, the rest of his party does not appear to be listening—certainly not his colleagues at the Department of Trade and Industry. However, the Government are not alone.
In the very week that national Governments are meeting to discuss climate change, the Labour party manages to table a motion entitled "Energy Policy" which makes no mention of the environment or sustainability, let alone global warming and its relationship to the use of energy. Indeed, the motion contains no indication of what the party's energy policy might be. Was the party not aware of the problems of global warming? Did it simply decide that it was not sufficiently important to warrant a mention? Or, to judge by the brief comments that we have heard tonight, perhaps it simply does not understand the issue.
Each and every one of us needs energy, but no one consumes energy for the sake of it. Businesses and consumers need energy services such as heat, light and power, but the key question is whether those energy services can be delivered satisfactorily simply through the

free operation of the market in energy supply. Unlike the Government, the Liberal Democrats think not. I should like to take a few minutes to explain why, and say what needs to be done.
First, let us consider the facts. Pollution associated with energy use accounts for the majority of the most serious current environmental problems we face. It is true that the substitution of gas for coal in recent years has contributed to a significant fall in CO2 emissions in this country, as has the recession, but the failure to incorporate environmental costs and benefits into economic decisions has meant that energy efficiency levels over the whole economy have hardly improved since the late 1980s.
The gains from the dash for gas were a one-off—they cannot be repeated. As, we hope, the economy comes out of recession, they will not even be sustained unless we get back to the important long-term business of improving the efficiency of our energy use.
As fuel prices have declined in real terms over the past 15 years, the motivation to invest in energy conservation projects has been largely non-existent, while the regulatory regime has promoted and encouraged suppliers to increase sales rather than improve efficiency.
Gas competition will bring further cuts in prices. Businesses that once employed business efficiency managers are now employing contract managers, realising faster savings by changing suppliers, but gaining no environmental benefits. That situation has been exacerbated by the inadequate funding of the Energy Saving Trust, due to the decision of the gas regulator to rule out the levy, by the lack of action by the Government to restore their original pledges on it, and by Government cuts in the home energy efficiency scheme.
Eight million families remain afflicted by fuel poverty, the inability to afford adequate warmth in the home and an absence of capital to make efficiency improvements that would cut their bills while creating a warmer home. The impoverished in society live in the worst insulated houses, suffer most when fuel prices rise, cannot afford new and energy-efficient appliances, and therefore waste more of their money and contribute disproportionately to environmental damage by wasting more of the energy they buy. Policies for sustainability must therefore ensure that those who are already worse off are not made more so, and that the prosperity and employment that can be generated by the right economic programme is spread evenly throughout society.
A reduction in overall energy use is an essential component of any serious attempt to combat pollution, and should also be part of any serious policy to combat fuel poverty. Such a reduction is not a hair-shirt option: about going without warmth or light or about businesses closing. It is about saving waste, not cutting essentials. Government figures show that 50 per cent. of energy used in the United Kingdom could be saved with existing technology alone. Even at current prices, energy use is at least 20 per cent. higher than would be economically optimal, and represents an economic loss of about 3 per cent. of gross domestic product.
Liberal Democrats believe that there is enormous scope in this approach. First, we would introduce mandatory standards and information to ensure that new buildings, machinery, vehicles and appliances were more energy efficient, and we would encourage consumers to take


efficiency into account when making purchasing decisions, by providing advice, information and education.
Secondly, we would give more support to renewable sources of energy through requirements on energy generators, and redirected research and development support. We would stop the ludicrous cost of subsidising a nuclear industry that has proved uncompetitive and—internationally—a threat to the environment. By cutting energy use and investing in development of alternative energy, we will show, as I have always believed, that the nuclear industry is unnecessary as well as uneconomic.
We read in last weekend's Financial Times that the Labour party is considering boosting the United Kingdom coal industry by subsidising electricity generated by clean-coal technology, as it is called, with money earmarked for renewable energy. So-called clean-coal technology may be cleaner than conventional coal power stations in terms of some pollutants, but it still has a direct impact on increasing global warming.
That Labour party proposal makes a nonsense of its claim to understand the threats to the environment—let alone tackle them—especially given that comments tonight have made it clear that the renewable energy levy, of all things, should pay for the coal industry subsidy. Such a subsidy would make it impossible for this country to meet the reduction in carbon dioxide emissions that are needed to combat global warming, which other Labour spokespeople have suggested they want to achieve.
Thirdly, we would introduce a major programme of investment in energy conservation, organised and funded through the Energy Saving Trust. About £1 billion a year will be released for that by removing—by legislation if necessary—the regulators' block on the Energy Saving Trust levy. We will implement a policy that the Government pledged, but on which they have failed to take action.
Since the policy will come in as the nuclear levy goes out, it need not add to the cost of electricity. Householders will have access to a range of loans and incentives to invest in energy efficiency improvements, especially the poorest, who face the misery of cold, draughty homes and huge fuel bills. Moreover, it will provide a huge boost to employment in this labour-intensive industry.
Finally, and most important, we will reform the tax system—switching the burden of taxation away from employment and income towards pollution and resource use. In all the countries of the Organisation for Economic Co-operation and Development over the past 20 years, the tax burden on labour has greatly increased; yet, on the use of environmental resources, it has fallen. That distribution of the tax burden has led to increased unemployment and environmental degradation. It has made sense for business to invest in low-tax, energy-consuming capital equipment instead of in labour. Businesses that need to invest heavily in people are disadvantaged by the tax system, whereas for decades Governments have helped energy-intensive capital investment, which often replaces jobs with machines.
By shifting the tax burden from good things such as jobs to bad things such as pollution and the excessive use of limited natural resources, we shall protect the environment, create new jobs and encourage new, green industries that tend to be more labour intensive. Recycling, for example, is 10 times more labour-intensive

than landfill, and our proposed programme of insulating low-income homes in the United Kingdom could create 50,000 jobs.
However, our key policy will be the phased introduction of a carbon tax. We can create a long-term incentive to save energy and switch to less polluting fuels only if there is a long-term incentive to do so and the polluter genuinely pays. The revenue generated will be recycled into the economy through cuts in other taxes with an overall positive economic impact.
Those on low incomes will be protected from higher costs by limiting carbon tax increases and, where necessary, providing transitional help. Therefore, we shall combine that policy with an overall cut in fuel bills for the poorest households by helping pensioners and low-income families use less energy and have warmer homes through insulation. That is the purpose of our investment in the work of the Energy Saving Trust.
We have said in the past that we would adopt a carbon tax in the context of an European Union proposal, but that is increasingly unlikely in the short term. Provided that there is a gradual approach, we believe that Britain can gain both environmentally and economically by imposing a carbon tax—alone, if necessary.

Mr. Tim Devlin: If the hon. Gentleman is so in favour of a carbon tax, why did he not support the imposition of VAT on fuel?

Mr. Taylor: First, because VAT was imposed on all energy uses, not only those that created pollution. That does not make sense in environmental terms, although it may have made sense to the Government in terms of trying to balance their books.
Secondly—and crucially—the difference between what the Government did and what we are proposing is that our proposals are tax-neutral. We are talking about imposing environmental taxes, but cutting taxes on jobs and other goods. The hon. Gentleman would probably have preferred that had the Government proposed it; however, they made no such proposal.
Let me add one final difference. We make such a proposal before the election and spell out what we would do, whereas the Government pledged not to increase taxes, and specifically, not to increase VAT. There is a choice between explaining one's policies to the electorate and deceiving them, and we come down firmly on the side of explanation.
Carbon taxes have been introduced in four European countries—the Netherlands, Finland, Norway and Sweden—without hurting either their citizens or their industry.
There is no evidence that higher energy prices need to be detrimental, even to the competitiveness of relatively high energy-using industries, providing that they know what is happening and have time to invest in energy-saving measures. Energy prices in Japan are 49 per cent. higher than those in the United Kingdom, and energy prices in Germany are 41 per cent. higher, but that has not made them uncompetitive, as they use energy more efficiently. The aim of a carbon tax is to create the expectation that energy prices will rise, so that energy conservation becomes a powerful incentive for designers, manufacturers and consumers.
The tax raised would help to cut other taxes such as VAT and employers' national insurance, leaving most people better off and creating extra growth in the economy and more jobs.
However, tax reform in itself is not enough. We also need to reform the energy market. The achievement of those environmental and social aims implies an energy market structure that requires energy suppliers to treat energy conservation on a par with energy supply. We have built in incentives to encourage suppliers to improve energy efficiency for their customers rather than to sell ever-increasing quantities of fuel. That approach also ensures that poor or geographically remote consumers are guaranteed access to supply on equal terms with those who are richer or live in less remote areas. That would be almost impossible to achieve under the current Government's plans to liberalise the domestic energy market.
We strongly supported the Government in introducing more competitiveness into the energy markets, as it encourages greater efficiency, but we would reform the system of awarding licences to promote investment in energy conservation. A commitment to energy efficiency measures should be a prerequisite for the award of a licence, and suppliers should be monitored by the regulator to ensure that they meet agreed targets. Without such an arrangement, they will not meet the targets, as we have seen with British Gas, which is already dropping several of its programmes.
I do not believe that any supplier should secure a long-term contract, with all the advantages that that brings, unless it can show that it will be linked with investment in energy conservation. In that way, we aim to ensure that suppliers compete in the provision not only of energy but of energy conservation.
Many still argue that we cannot afford to protect the environment. They say that environmental measures would increase unemployment and harm most people. That is a myth. The fact is that action to protect the environment, whether it means moving towards environmental taxes or encouraging people to drive more energy-efficient cars less often, can increase jobs and competitiveness, and will certainly improve our quality of life. Moreover, our carbon tax proposals would leave people better off financially.
In addition, the Organisation for Economic Co-operation and Development estimates that environmental protection—

Dr. Spink: The hon. Gentleman is making a brave speech, and, and unlike Members from the other Opposition party, he is actually spelling out what his policies are. That is good, although I think that some of my constituents might be afeared of the 40 per cent. hikes in energy prices that the hon. Gentleman seems to espouse. Does he agree with the hon. Member for Barnsley, West and Penistone (Mr. Clapham) that the energy sector companies should be renationalised during the coming decade? Or would he step back from that idea?

Mr. Taylor: No, I do not believe that the companies should be renationalised, and—unlike the Labour party, perhaps—we never proposed that they should be. I am

about to finish my speech, so I do not want to follow up the hon. Gentleman's intervention too far, but I must tell him that, although I have never put any figure on the changeover, I have said that the changes would be phased in gradually, that we would help people on low incomes to cut their bills through energy conservation, and that the money would be used to cut other taxes.
So the measures would be fiscally neutral. If anything, the nature of energy use in this country means that the benefits of our policy would result in a slight transfer away from business and towards the consumer.
The switch to cleaner generating technologies and more energy-efficient products, together with the huge backlog of home energy conservation work, will create major export and employment opportunities. Ours is a win, win, win strategy. Householders will win because investment in energy conservation will provide warmer homes and lower net energy bills as people need to use less energy. Taxpayers will win, because our proposals mean not paying more tax but paying different tax, and most households will pay less—although businesses and individuals that simply waste energy will pay more.
Indeed, everyone will win, because such an environmental strategy will produce more jobs in a cleaner and healthier environment within the United Kingdom, while giving the world a lead in averting the catastrophic impacts of climate change.

Mr. Nigel Waterson: I begin by paying a warm tribute to my right hon. Friend the Minister for Industry and Energy, who opened the debate, because he has been at the centre of so many of the exciting and productive developments in energy in recent years.
When we have stripped the Opposition motion of its party political rhetoric, although it makes a passing reference to consumers, it has nothing to offer them. There is no mention whatever of energy saving or of the environment. The wording of that motion confirms the Opposition's total lack of interest in the environment.
In the week when the parties to the United Nations framework convention on climate change are meeting in Geneva to discuss the report of the intergovernmental panel on climate change, which unanimously concluded that there is now a discernible human influence on global climate, the Labour party has tabled a motion on energy policy that does not even mention energy conservation. That beggars belief.
We know that energy conservation is important for three main reasons. The first reason is the need to conserve finite resources, which has a broad measure of support among the British people. Secondly, there is the protection of our environment, and all the follow-through from the Rio summit. The third reason is our desire to help the consumer, especially in places such as Eastbourne, where there is a combination of older people, often on limited incomes, and aging housing stock. Everyone has a contribution to make—individual property owners, local authorities and business.
On that note, I would like to refer briefly to "Making a Corporate Commitment", a Government campaign seeking board-level commitment to good energy management. More than 1,900 organisations from the private and public sectors have agreed to make the


commitment, and 53 trade associations and professional bodies—including the CBI and the Institute of Directors—have agreed to endorse it to their members. Signatories agree to appoint a board member to take responsibility for these matters and to join the campaign to raise the profile of energy management at the highest levels of their organisation. "Making a Corporate Commitment" seems to bring real results, as market research indicates that the energy management performance of signatories is significantly better than that of business generally.
Local authorities have their own role, and I wish that I had more time to discuss the Home Energy Conservation Act 1995, which was widely supported in the House and effectively calls on local authorities to carry out an audit of the housing stock in their area so that measures can be taken to conserve energy. That again will help the constituents whom I have described.
Individuals are not just involved out of a sense of altruism or because of their concern for the environment, but because it also makes sound financial sense. A major thrust of the Government's energy policy is greater efficiency and lower prices, as we have heard, as well as removing burdens from the taxpayer—something of which we must not lose sight. We know that the nationalised industries cost the taxpayer £50 million each week in 1979, and that they now contribute £55 million each week to the Exchequer. We know that domestic electricity prices have fallen by 8 per cent. in real terms, and that electricity customers in England and Wales received this year a £50 rebate on their bills following the sale of the National Grid. It is worth reminding the House that under the previous Labour Government, the price of electricity went up in cash terms by 2 per cent. every six weeks—some 16 per cent. a year.
The average industrial gas price has fallen by 48 per cent. in real terms, while the domestic price—including VAT—has fallen by 18.5 per cent. in real terms. Consumers in the gas competition pilot area in the south-west are being offered discounts of up to 20 per cent. on the existing British Gas tariff.
Oil prices are now lower in real terms than at any stage since oil was discovered in the North sea, and we have also heard some incredible statistics about the effects of privatisation on the coal industry. I had the honour of serving on the Committee that considered the Coal Industry Act 1992.
These are tangible results of the Government's policies to open up markets to free competition and to privatise. Electricity bills have fallen, and they will fall also as a result of the reduction in the fossil fuel levy in England and Wales and changes to the nuclear energy agreement in Scotland. In June, Professor Littlechild announced that, as a result of nuclear privatisation, he expected to be able to reduce the fossil fuel levy from 10 per cent. to 3.7 per cent. This will result in reductions in typical household electricity bills of up to £20 a year.
Time is short, and there are other matters upon which I would liked to have touched—in particular, the Liberal Democrats' latest proposal for a carbon tax. Such a tax would target car drivers, and particularly those who really need their cars such as elderly people in my constituency and those in rural areas. It is an ill-thought-out tax and will create great burdens, but that is not a matter for this

evening. In conclusion, both Opposition parties are bankrupt of policy ideas on energy. They have nothing to offer the consumer or the shareholder.

Mr. Ken Purchase: The Conservative party is not bankrupt of policy because it does not have one. Its energy policy, as with so many things, is to rely on the market. I shall return to that point.
It has been two short years since the Confederation of British Industry called on the Conservatives to provide a champion for industry. It wanted that because it took a sensible Keynesian approach to manufacturing and recognised that there must be partnership between industry, Government and the people. The Conservatives long believed that we could leave everything to the market. The first 15 years of their rule after 1979 were about the market. Their policy aim has been to privatise everything that they can. As the Government, they are entitled to do that. However, they have never recognised that there is a role in any economy for the pragmatic approach that some things are best done in one way, and others in another way, but that usually there is also a middle way.
Without support from a Government committed to it, manufacturing industry will fail. Indeed, it has almost failed and is only now starting to make its way back. The energy industry shows the lack of a policy save that of leaving things to the market. That will not work because the market, sensibly, is driven by profit. The idea that we should exploit the cheapest form of energy and then move on to the next cheapest form is bound to lead to disaster because its effects on the rest of the country and, most importantly, on discovery and exploitation, are unpredictable.
There is also the British Gas problem with take-or-pay contracts. It seems only a few short weeks since there were calls to assist British Gas because of the great expense of such contracts, which were negotiated only a few years ago. Now a report entitled, "The Disappearing Gas Bubble" suggests that, far from creating a loss, it is likely that British Gas will make a profit from those long-term contracts.
In respect of oil, variations have been created in the short, medium and long-term time scales such that it is difficult, without a proper policy, to make any sense of the exploitation and production of energy sources. Industry cannot work—the wheels will not turn—without sources of energy. That is why energy policy must be at the heart of industrial policy.
British Energy said that its decision not to proceed with Sizewell C and Hinckley Point C was taken because it was
a sensible response to the realities of the current energy market which is characterised by an excess of generating capacity, falling electricity prices, and uncertainties over the structure of generating and distributing industries".
It calls for a balanced energy policy.
Our energy companies have been exposed to possible foreign buyers. The Americans have bought Midlands Electricity and any hope that the Government may have of creating a balanced energy policy sinks further into the sunset with each buy-out. The logic of the market is not to create competition ad infinitum but to create monopolies. That is the only way in which finance capital can work. Control is impossible and despite all our


attempts to regulate, we will find that in this activity, which is so crucial to our manufacturing capacity, the state—the Government—will have to have a hand on the wheel.
Conservative Members may ask how we would pay for renationalisation. Renationalisation is not the only option. It is right to point out, however, that if the Government had not spent, given away, wasted and thrown away all the money that they have received from North sea oil and from privatisations, for example, there would be money aplenty to renationalise those industries if that was the right and proper approach to creating an energy policy.
The truth of the matter is that we cannot have an energy policy that makes any sense for the vital manufacturing sector under a laissez-faire system. Without a policy, manufacturing will always be at the mercy of finance capitalists, who see it as in their own interests to exploit that which brings them the fattest and quickest profits, without regard to what may happen in the future.
There is such a long time horizon when considering energy exploitation and marketing, and it is right for us—for Opposition Members, at least—to ensure that there is a constant and sustainable flow of reasonably priced energy and that we avoid the rapid peaks and troughs that characterise the energy market. We must have a longer-term view to meet our responsibilities to unborn generations, and we must realise that only through a sensible, balanced energy policy will we achieve those responsibilities. We must realise that laissez-faire market economics, because of their internal logic, are incapable of ever delivering such a policy.

Mr. Piers Merchant: I was very entertained by the speech of the hon. Member for Leeds, West (Mr. Battle). I do not know whether he intended to be amusing, although I suspect that he did not. When he was not frightening the House, however, he certainly was amusing. He seemed to suggest, for example, that a price could be too high and too low at the same time. He also pretended that he did not know anything about depreciation. The logical assumption is that he thinks that an old second-hand car should command the same price as a brand new car. If he believes that, I recommend that he tests the assumption.
I am more concerned about the serious set of deficiencies in the Labour motion itself. It is about energy policy, but it makes no mention whatsoever of energy conservation. As hon. Members have already mentioned, Labour's motion is being debated—of all weeks—in the week in which representatives of the United Nations are discussing the impact of man's activities on the global climate. I find that timing utterly bizarre.
Energy conservation is a very important part of the formula in the balances between supply and demand and between consumption and production. It should play an important role in this debate and in any discussion on energy. The Government have realised that fact, and they have introduced measures that deal with the need to take resolute action to achieve energy conservation.
I have time to mention only one such measure, but it is an important one—the home energy efficiency scheme. I pay tribute to my hon. Friend the Minister for

Construction, Planning and Energy Efficiency for the energy that he has put into making the scheme successful. Since it was introduced in 1991, 1.8 million households have benefited from grants made available to them to ensure that their properties are brought up to a high standard of energy conservation—in simple, low-technology terms, such as by the use of insulation. Many of my constituents have benefited from the scheme.
Like many other hon. Members, I have accompanied representatives of the scheme to constituent's houses to see the installation of measures that not only reduce energy use and help with the environmental problems caused by pollution but that reduce the cost of the energy used by those people, many of whom are on low incomes. The average household benefiting from the scheme has had an annual reduction of more than £40 in its energy bills. In the last full financial year, the Government put some £105 million into the scheme. That is a worthwhile contribution to the problem of energy use, cost and conservation. It is a great shame that the Opposition should be so blind as to fail to recognise the part that that plays and therefore to include it in the motion.
The motion is deficient in other ways, too. It is full of internal contradictions, which reflect the Labour party's deficiencies in energy policies and its approach to the energy industry. One question that is worth asking is: does the Labour party believe in a private sector energy industry? Labour Members owe the House a simple answer. They have opposed every measure that the Government have introduced slowly to privatise the entire industry over the past decade and more, yet they now pretend that they accept a private energy industry. However, their motion and other policy statements show that, in practice, they would restrict the market. They would bring back state planning and Government control so that we would see nationalisation in another guise. That would bring severe danger to all sectors of our economy.

Mr. Battle: New Labour, new dangers.

Mr. Merchant: The hon. Gentleman admits as much.
Gas consumers have benefited considerably from reductions in gas prices: industry has benefited from a 48 per cent. reduction; and domestic consumers from a 24.5 per cent. reduction. And electricity consumers have benefited from reductions in electricity prices: industry has benefited from a 10.5 per cent. reduction; and domestic consumers from an 8 per cent. reduction. Those benefits will be wiped out by a return to a command economy. Under a Labour Government, we would see the return of the sort of policies that contributed, in the last year of the last Labour Government, to an increase in the price of fuel by 2 per cent. every six weeks.
Millions of ordinary people who have invested in shares in the energy industries would also lose. Under privatisation, shareholders have gained through the long-term increase in the value of their investments, and the large yields and returns that they have brought. They would lose all those benefits if the industry was so rigidly controlled that profits were squeezed to a minimum. The Labour party admits that that is its objective. Millions of members of the public who have invested in the industry and benefited from it would lose out.
Taxpayers would also lose because, under a command economy, we would return to the day when, instead of taxpayers benefiting from £55 million in tax revenues, subsidies of nearly that sum would be required from the taxpayer.
Finally, the industry would lose because, since privatisation, it has been set free to diversify, compete and strive for greater efficiency. It has been free to pursue activities in other areas where necessary. That is part of a free market economy. It is also free to change ownership because that, too, is part of a free enterprise economy. It all adds diversity, strength and flexibility, and drives towards efficiency and a better deal for consumers.
All those benefits would go if the industry were put back into the state straitjacket. All that the Labour party has to offer are old policies dressed up in a new tinselled package, offered in a new way but representing exactly the same threats and weaknesses as its policies represented before. We should not be fooled by that.
The motion is deficient by virtually every test. I bitterly regret the fact that the Labour party could not deal with the subject seriously today and look at the real issues and challenges that the future presents in terms of energy policies.
Much needs to be said about the need to find new sources of energy supply, to find environmentally friendly methods of generating our energy and to limit our energy consumption, as the hon. Member for Truro (Mr. Taylor) rightly said. That must be part of the formula, because we must be aware of the damage that is done to the environment by energy production and we must develop means of energy conservation that reduce the damage.
It is an indictment of the Labour party's approach to this subject that its muddled, incomplete and cynical motion fails to address those underlying issues. It shows contempt for the arguments and challenges with which we should concern ourselves when dealing with the energy industry and the energy market.

Mr. Paddy Tipping: I am very conscious of the time, and I hope that the House will forgive me if my contribution to the debate is very much on a constituency issue. In the Sherwood constituency, there are still four collieries.
I believe that the coal industry faces a major challenge. New contracts are due in 1998, and the challenge before the coal industry can be risen to. I estimate that the newly privatised coal industry is producing at £1.30 per kJ. I estimate that that price will have to come down to £1.10 to compete in the highly competitive market.
In the long term—[Interruption.]

Madam Deputy Speaker (Dame Janet Fookes): Order. I do not expect to have sub-conversations between the two Front Benches.

Mr. Tipping: In the long term, there is a place for coal in the energy market. In the short term, we are likely to witness the growth of gas. In the medium term, it is likely that nuclear companies will diversify and go into gas. No new nuclear power stations will be built. When gas goes, coal will be our only national natural asset. That is why we need to keep it going.
That is why we need to invest in clean coal technology. I notice that Japan spends more on clean coal technology than this country does. We must find devices to keep coal going during the next few years because, in the long term, coal will be our salvation. We need an energy policy that is not short-term but recognises the value of coal. Coal can be the cornerstone of that energy policy.

Mr. Nigel Griffiths: I thank hon. Members from both sides of the House for their condolences following my father's death in a mountaineering accident. In the House, many harsh words are often exchanged in the passion of debate, but when tragedy strikes, no more generous spirit is to be found anywhere.
This has been an illuminating debate because it has exposed the great shortcomings in the Government's energy policy. In fact, they cannot even claim to have an energy policy. The Government abolished the Energy Secretary's office and the Select Committee on Energy. The casualties included not only tens of thousands of miners, electricity workers and gas workers but the distinguished hon. Member for Rochford (Dr. Clark), who chaired the defunct Select Committee with such distinction.
The Government have pursued a policy of privatisation, not for the prosperity of consumers in British industry, but to enable them to make short-term tax cuts. The main beneficiaries of that policy have been company directors and ex-Ministers, while consumers have often had to put up with poorer services. Even the supposed benefits of price cuts are eroded by the Government's tax increases.
There is no concept in this country of any strategic importance of fuel. We are a major energy-producing country without an effective voice in Cabinet. Coal, our greatest natural resource, the foundation of our industrial power, has been relegated to a minor role. The standards in our pits have continued to tumble and accidents have reached horrifying levels. On oil, we have a licensing and compliance regime that has made Britain the softest touch to the multinationals. Gas, once the Marks and Spencer of energy, is now judged to deliver the poorest service. Untold damage has been done to public confidence in nuclear energy by complacency about the ownership and control of that potentially hazardous resource. There has been minimal investment in alternative energy—such as gas and electricity for cars, wind power and wave power—and there have been cuts in the energy conservation budget. We condemn those Tory failures.
As my hon. Friends have pointed out, the Labour party has a battery of positive energy policies to tackle the real problems of the 1990s. The energy industry must be regulated for the benefit of consumers, not producers; there must be specific protection for vulnerable consumers, who must not be left prey to higher prices and no choice of supply; there must be wider access rights for rural households; there must be a major scheme to conserve energy and to bring the benefits of energy savings to every household; there must be energy labelling so that buyers of products know how much energy an appliance consumes; and there must be a windfall tax that attacks the boardroom abusers—we do not need the Tory tax, a VAT on millions of ordinary consumers.
The Minister put four questions to the Labour Front Bench, and I shall answer them. First, he asked whether the windfall tax will be retrospective. It will be based on the profits and the investment record of each of the utilities. Secondly, he asked which electricity companies will be taxed. Every company is being scrutinised. Thirdly, he asked how much money will be raised by the tax. Approximately £3 billion will be raised. Finally, he asked how long it will last. It will last as long as it takes to achieve a proper balance in the charges, profits and investment strategies of companies—and it will last as long as salaries as long as telephone numbers are paid to the directors in the boardroom.
It is hard for Ministers to face reality. On 18 June, when he last addressed the House, the Minister said:
We believe that the privatisation of Nuclear Electric will be as successful as previous privatisations."—[official Report, 18 June 1996; Vol. 279, c. 779.]
It has been such a flop that they can hardly give the shares away. The Minister was an early advocate of giving the shares away—he gave a powerful speech in favour of doing just that on 21 July 1980, and he has never regained any sense of reality. Since the present Minister took office in 1992, energy consumers have been hit by the imposition of a VAT, the closure of 200 high street gas showrooms and 400 electricity showrooms, and tens of thousands of jobs have been lost, including two thirds of the British Gas home energy advisers.
However, the Minister claims that consumers are better off. Post offices are no substitute for high street showrooms, where people could get advice on their bills, energy efficiency and appliances. People can pay their bills in post offices, but many post offices do not allow them to pay their bills for free—they add 88p to the bills of senior citizens and others. The Government have created a two-class system—some people are paying up to 12 per cent. more for their gas than others because they have bank accounts and direct debits while others are on pre-payment meters.
Every consumer wants to know why they are paying such high prices for fuel. We had the fastest falling raw energy prices in the 1980s and the 1990s, and only a shower of incompetents could fail to bring prices down, no matter who owned the utilities. Between gas privatisation in 1986 and now, gas prices have fallen by 23 per cent. and the cost to consumers has fallen by only 19 per cent. What has happened to the missing 4 per cent? The Government taxed it—they added VAT to fuel and wiped out any claimed savings from privatisation. They added £24 to the average household's gas bill—the Tory fuel tax.
Since electricity was privatised in 1990, the average bill has increased by 21 per cent., yet the cost of coal has decreased by 20 per cent. and the cost of gas has decreased by 9 per cent. The Government have taxed any benefits from privatisation and they have allowed the companies to pocket the savings. The latest abuse is the mis-selling of gas contracts, which has been highlighted in the debate tonight.
I answered the Minister's four questions, so I ask his hon. Friend the Minister for Small Business, Industry and Energy to answer four questions from the Labour party. Will he undertake not to increase VAT on fuel? Will he

take action to restore high safety standards in our pits? Will he reinvest in the home energy conservation programmes? Will he support public transport in order to conserve energy and protect our environment in the long term? We suspect that his answers to all four questions will be no, no, no and no. The Government have nothing to offer and that is why they should go.

The Minister for Small Business, Industry and Energy (Mr. Richard Page): I came to the Chamber tonight looking forward to the debate with some enthusiasm. As the seconds tick away to the next general election, I hoped that we would hear something about the Opposition's energy policy. I am in the same position as the man leaving a hall where a Member of Parliament was speaking. He was asked how long the Member of Parliament had been speaking and he replied half an hour. He was then asked what the Member of Parliament had said, and the man replied, "Well, nothing yet". As I rise to speak at the Dispatch Box, I am no wiser about the Labour party's policy than I was when the debate began.
The Opposition have had a good go at the Government—that is what Oppositions are for; it is all part of the game. As to policy, we got a big, fat zero. One might say that it is enough for the Opposition simply to oppose—there is no need for them to do anything else. However, is negativity the right approach of a potential Government who are waiting to provide positive leadership to voters? No, it is not. Whatever the slogans and however skilled the airbrush techniques of the new Labour spin doctors, the centralised ethos of the old Labour party has not disappeared; it lies like an old rotting log in the stream. [Interruption.] The hon. Member for Leeds, West (Mr. Battle) should keep quiet, because I shall come to his contribution and I will sort him out.
The Labour party's policy manifests itself in schizophrenic behaviour and policy announcements. It is bedeviled by paradox and inconsistency. The Opposition do not like privatisation, but they will not renationalise. They want to fine companies with a windfall tax, but they do not want the consumer to pay any part of the cost. They complain when people make a profit from buying privatised shares and then complain when others make a loss. They say that they want competition, but they hedge their bets by restricting market freedom with controls on pay, retrospective taxation and limitations on the regulator's independence. The list goes on and on, and it makes the Vicar of Bray seem the model of theological consistency.
The Opposition would impose the same old controls. They want to tell the industry what to do and what to spend: it is the return of the lunchtime directive. It did not work before and it will not work now. It is instructive to recall that a former Labour energy spokesman admitted exactly that in the House. The hon. Member for Truro (Mr. Taylor) came to the House and spelt out the Liberal Democrats' policies. I do not agree with them, but in so doing, he has increased in my estimation.
I return to some of the comments made during the debate, and in particular to the contribution by the hon. Member for Leeds, West.

Mr. Battle: I am really worried.

Mr. Page: The hon. Gentleman should be worried. There was plenty of sound and fury—it obviously rubbed


off on his hon. Friend the Member for Edinburgh, South (Mr. Griffiths)—but he was a little short on reality. He could not grasp the difference between capital costs of construction and market values. He took a 10 second gratuitous swipe at the non-fossil fuel obligation and brushed aside the 151 renewable energy projects that are generating some 335 MW. He completely ignored the other 600 projects that are under contract.
At the same time, the hon. Gentleman was dismissive of the new markets that are creating employment in the export field through selling abroad equipment for the renewable sector. The hon. Gentleman made some very serious and damaging allegations regarding the flotation of British Energy. He claimed that information was suppressed, praying in aid that informative document, the Hinkley newsletter dated 1 July. The station manager at Hinkley Point has been contacted. He confirmed that the newsletter, although dated 1 July, was not put out until 4 July, and that the section regarding the weld was not drafted until 4 July. I give the hon. Member for Leeds, West a chance to apologise to the House and my right hon. Friend for the gross and unfair allegations that he made against him.

Mr. Battle: I will withdraw nothing until the Minister tells me why on earth he employs a station manager who writes a letter on 4 July and dates it 1 July.

Mr. Page: I gave the hon. Gentleman an opportunity to admit that he was wrong, and to withdraw what he had said. He has not done so, and I am afraid that he has cheapened himself by his response.
The hon. Member for Barnsley, West and Penistone (Mr. Clapham) commented on coal safety. He has a record of concern about that, which I fully acknowledge. I can tell him that a recent National Audit Office report on the sale of British Coal's mining operation records, dated May 1996, said that the Health and Safety Executive was satisfied that safety was given a high priority in the sale, but what mattered was not so much ownership as the existence of a robust and regulative framework. The HSE is publishing a special report later this month, and I look forward to it with confidence.
My hon. Friend the Member for Rochford (Dr. Clark) opened up the exciting possibility of energy in this country driven entirely by nuclear power, and—rightly, in my view—drew attention to the value of feedstock. My hon. Friends the Members for Eastbourne (Mr. Waterson) and for Beckenham (Mr. Merchant) drew attention to the important work that the Government were doing on energy efficiency, which the Labour party completely missed. I thank my hon. Friends for the tribute that they paid to my hon. Friend the Member for West Hertfordshire (Mr. Jones) for the informative and valuable work that is being done in that regard.
During the past few months, much has been made of the metamorphosis within the Labour party—or new Labour, as we are supposed to say. I always thought that sticking a big label on something saying "new and improved" was a fairly cheap and fast way of raising the market profile without necessarily having to go through the tedious business of actually improving the product—but it carries a few risks. Eventually the consumer sees through it, recognises that this wonderful new brand has nothing to offer—it is the same tired old product as

before—and resolves not to buy the product again. That sounds exactly like the Labour party to me: a lick of paint, a toothy smile, but the same—[Interruption.]

Madam Deputy Speaker: Order. I had occasion earlier to reprimand the Front Benches for making seated interventions. I note that that now applies to the Bench below the Gangway.

Mr. Page: Thank you, Madam Deputy Speaker.
It seems to me that, in the Labour party, the same old command-and-control instincts are lurking in the shadows. As today's debate has illustrated yet again, the fact that Labour has been out of power for so long has aroused an unhealthy desire to tell everyone exactly what to do.
Let me return to the original theme. The Labour party has no ideas of its own, and, in particular, no ideas that anyone would like. If no one believes me, let me add that I have a copy of "New Labour New Life for Britain". That document—a real snip at £10—shows how much Labour cares about the energy sector, that £1 billion sector on which many jobs depend. It refers to the windfall tax. We know that the Labour party is very good at raising taxes. Then there is another comment. The hon. Member for Edinburgh, South spoke of a battery of positive measures; the battery is, apparently, the
extraordinary benefit of North Sea Oil.
That is the Labour party's energy policy: that is precisely what they are offering to the country. That is called "raising Britain's potential" and the "stakeholder economy".
But we know what we are doing. We know that we brought radical change to the energy sector. We have brought benefits to consumers in the form of lower prices and better services, and I know that that is the way to go forward. I draw my remarks to a close by paying tribute to my right hon. Friend the Minister of State for the work that he has done in this context.

Mrs. Jane Kennedy: rose in her place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 269, Noes 294.

Division No. 204]
[9.59 pm


AYES


Abbott, Ms Diane
Beggs, Roy


Adams, Mrs Irene
Beith, Rt Hon A J


Ainger, Nick
Bell, Stuart


Allen, Graham
Benn, Rt Hon Tony


Anderson, Donald (Swansea E)
Bennett, Andrew F


Anderson, Ms Janet (Ros'dale)
Benton, Joe


Armstrong, Hilary
Bermingham, Gerald


Ashton, Joe
Berry, Roger


Austin-Walker, John
Betts, Clive


Barnes, Harry
Blunkett, David


Barron, Kevin
Boateng, Paul


Battle, John
Bradley, Keith


Bayley, Hugh
Bray, Dr Jeremy


Beckett, Rt Hon Margaret
Brown, N (N'c'tle upon Tyne E)






Byers, Stephen
Hardy, Peter


Caborn, Richard
Harman, Ms Harriet


Callaghan, Jim
Harvey, Nick


Campbell, Mrs Anne (C'bridge)
Hattersley, Rt Hon Roy


Campbell, Menzies (Fife NE)
Henderson, Doug


Campbell, Ronnie (Blyth V)
Heppell, John


Campbell-Savours, D N
Hill, Keith (Streatham)


Canavan, Dennis
Hinchliffe, David


Cann, Jamie
Hodge, Margaret


Chidgey, David
Hoey, Kate


Chisholm, Malcolm
Hogg, Norman (Cumbernauld)


Clapham, Michael
Home Robertson, John


Clark, Dr David (South Shields)
Hood, Jimmy


Clarke, Eric (Midlothian)
Hoon, Geoffrey


Clarke, Tom (Monklands W)
Howarth, George (Knowsley North)


Clelland, David
Howells, Dr Kim (Pontypridd)


Clwyd, Mrs Ann
Hoyle, Doug


Coffey, Ann
Hughes, Kevin (Doncaster N)


Cohen, Harry
Hughes, Robert (Aberdeen N)


Connarty, Michael
Hughes, Roy (Newport E)


Cook, Frank (Stockton N)
Hughes, Simon (Southwark)


Cook, Robin (Livingston)
Hutton, John


Corbyn, Jeremy
Illsley, Eric


Corston, Jean
Ingram, Adam


Cousins, Jim
Jackson, Glenda (H'stead)


Cox, Tom
Jackson, Helen (Shef'ld, H)


Cummings, John
Jamieson, David


Cunningham, Jim (Covy SE)
Janner, Greville


Cunningham, Rt Hon Dr John
Jenkins, Brian (SE Staff)


Cunningham, Roseanna
Jones, Barry (Alyn and D'side)


Dafis, Cynog
Jones, Ieuan Wyn (Ynys MÔn)


Dalyell, Tam
Jones, Jon Owen (Cardiff C)


Darling, Alistair
Jones, Lynne (B'ham S O)


Davidson, Ian
Jowell, Tessa


Davies, Bryan (Oldham C'tral)
Kaufman, Rt Hon Gerald


Davies, Chris (L'Boro & S'worth)
Keen, Alan


Davies, Rt Hon Denzil (Llanelli)
Kennedy, Jane (L'pool Br'dg'n)


Davies, Ron (Caerphilly)
Khabra, Piara S


Davis, Terry (B'ham, H'dge H'I)
Kilfoyle, Peter


Denham, John
Kirkwood, Archy


Dewar, Donald
Lestor, Joan (Eccles)


Dixon, Don
Lewis, Terry


Dobson, Frank
Liddell, Mrs Helen


Donohoe, Brian H
Livingstone, Ken


Dowd, Jim
Lloyd, Tony (Stretford)


Dunwoody, Mrs Gwyneth
Llwyd, Elfyn


Eagle, Ms Angela
Loyden, Eddie


Eastham, Ken
Lynne, Ms Liz


Etherington, Bill
McAllion, John


Evans, John (St Helens N)
McAvoy, Thomas


Fatchett, Derek
McCartney, Ian


Faulds, Andrew
Macdonald, Calum


Field, Frank (Birkenhead)
McFall, John


Flynn, Paul
McKelvey, William


Foster, Don (Bath)
Mackinlay, Andrew


Foulkes, George
McLeish, Henry


Fraser, John
Maclennan, Robert


Fyfe, Maria
McMaster, Gordon


Galbraith, Sam
McNamara, Kevin


Galloway, George
MacShane, Denis


Gapes, Mike
McWilliam, John


Garrett, John
Madden, Max


George, Bruce
Maddock, Diana


Gerrard, Neil
Mahon, Alice


Gilbert, Rt Hon Dr John
Mandelson, Peter


Godman, Dr Norman A
Marek, Dr John



Godsiff, Roger
Marshall, David (Shettleston)


Golding, Mrs Llin
Martin, Michael J (Springburn)


Gordon, Mildred
Martlew, Eric


Graham, Thomas
Maxton, John


Grant, Bernie (Tottenham)
Meacher, Michael


Griffiths, Nigel (Edinburgh S)
Meale, Alan


Griffiths, Win (Bridgend)
Michael, Alun


Gunnell, John
Michie, Bill (Sheffield Heeley)


Hall, Mike
Michie, Mrs Ray (Argyll & Bute)


Hanson, David
Mitchell, Austin (Gt Grimsby)





Moonie, Dr Lewis
Short, Clare


Morgan, Rhodri
Simpson, Alan


Morley, Elliot
Skinner, Dennis


Morris, Estelle (B'ham Yardley)
Smith, Andrew (Oxford E)


Morris, Rt Hon John (Aberavon)
Smith, Chris (Isl'ton S & F'sbury)


Mowlam, Marjorie
Smith, Llew (Blaenau Gwent)


Mudie, George
Snape, Peter


Mullin, Chris
Soley, Clive


Murphy, Paul
Spearing, Nigel


Nicholson, Emma (Devon West)
Spellar, John


Oakes, Rt Hon Gordon
Squire, Rachel (Dunfermline W)


O'Brien, William (Normanton)
Steinberg, Gerry


O'Hara, Edward
Stevenson, George


Olner, Bill
Stott, Roger


O'Neill, Martin
Strang, Dr. Gavin


Orme, Rt Hon Stanley
Straw, Jack


Parry, Robert
Sutcliffe, Gerry


Pearson, Ian
Taylor, Mrs Ann (Dewsbury)


Pendry, Tom
Taylor, Matthew (Truro)


Pickthall, Colin
Thompson, Jack (Wansbeck)


Pike, Peter L
Timms, Stephen


Pope, Greg
Tipping, Paddy


Prentice, Bridget (Lew'm E)
Touhig, Don


Prentice, Gordon (Pendle)
Trickett, Jon


Prescott, Rt Hon John
Turner, Dennis


Primarolo, Dawn
Tyler, Paul



Vaz, Keith


Purchase, Ken
Walker, Rt Hon Sir Harold


Quin, Ms Joyce
Walley, Joan


Radice, Giles
Wardell, Gareth (Gower)


Raynsford, Nick
Wareing, Robert N


Reid, Dr John
Watson, Mike


Rendel, David
Wicks, Malcolm


Robertson, George (Hamilton)
Wigley, Dafydd


Robinson, Geoffrey (Co'try NW)
Williams, Rt Hon Alan (Sw'n W)


Roche, Mrs Barbara
Williams, Alan W (Carmarthen)


Rogers, Allan
Wilson, Brian


Rooker, Jeff
Winnick, David


Rooney, Terry
Wise, Audrey


Ross, Ernie (Dundee W)
Worthington, Tony


Ross, William (E Londonderry)
Wray, Jimmy


Rowlands, Ted
Wright, Dr Tony


Salmond, Alex
Young, David (Bolton SE)


Sedgemore, Brian



Sheerman, Barry
Tellers for the Ayes:


Sheldon, Rt Hon Robert
Mr. Robert Ainsworth and


Shore, Rt Hon Peter
Mr. Peter Hain.


NOES


Ainsworth, Peter (East Surrey)
Bowis, John


Aitken, Rt Hon Jonathan
Boyson, Rt Hon Sir Rhodes


Alison, Rt Hon Michael (Selby)
Brandreth, Gyles


Allason, Rupert (Torbay)
Brazier, Julian


Amess, David
Bright Sir Graham


Arbuthnot, James
Brooke, Rt Hon Peter


Arnold, Jacques (Gravesham)
Brown, M (Brigg & Cl'thorpes)


Ashby, David
Browning, Mrs Angela


Atkins, Rt Hon Robert
Bruce, Ian (South Dorset)


Atkinson, Peter (Hexham)
Budgen, Nicholas


Baker, Rt Hon Kenneth (Mole V)
Burt, Alistair


Baker, Nicholas (North Dorset)
Butler, Peter


Baldry, Tony
Butterfill, John


Banks, Matthew (Southport)
Carlisle, John (Luton North)


Banks, Robert (Harrogate)
Carlisle, Sir Kenneth (Lincoln)


Bates, Michael
Carrington, Matthew


Batiste, Spencer
Carttiss, Michael


Bellingham, Henry
Cash, William


Bendall, Vivian
Channon, Rt Hon Paul


Beresford, Sir Paul
Chapman, Sir Sydney


Biffen, Rt Hon John
Churchill, Mr


Bonsor, Sir Nicholas
Clappison, James


Booth, Hartley
Clark, Dr Michael (Rochford)


Boswell, Tim
Clarke, Rt Hon Kenneth (Ru'clif)


Bottomley, Peter (Eltham)
Clifton-Brown, Geoffrey


Bottomley, Rt Hon Virginia
Coe, Sebastian


Bowden, Sir Andrew
Colvin, Michael






Congdon, David
Howard, Rt Hon Michael


Conway, Derek
Howell, Rt Hon David (G'dford)


Coombs, Anthony (Wyne For'st)
Howell, Sir Ralph (N Norfolk)


Coombs, Simon (Swindon)
Hughes, Robert G (Harrow W)


Cope, Rt Hon Sir John
Hunt, Rt Hon David (Wirral W)


Couchman, James
Hunt, Sir John (Ravensbourne)


Cran, James
Hunter, Andrew


Currie, Mrs Edwina (S D'by'ire)
Hurd, Rt Hon Douglas


Curry, David (Skipton & Ripon)
Jack, Michael


Davies, Quentin (Stamford)
Jenkin, Bernard


Davis, David (Boothferry)
Jessel, Toby


Day, Stephen
Johnson Smith, Sir Geoffrey


Deva, Nirj Joseph
Jones, Gwilym (Cardiff N)


Devlin, Tim
Jones, Robert B (W Hertfdshr)


Dorrell, Rt Hon Stephen
Jopling, Rt Hon Michael


Douglas-Hamilton, Lord James
Key, Robert


Dover, Den
King, Rt Hon Tom


Duncan, Alan
Kirkhope, Timothy


Duncan Smith, Iain
Knapman, Roger


Dunn, Bob
Knight, Mrs Angela (Erewash)


Durant Sir Anthony
Knight, Rt Hon Greg (Derby N)


Dykes, Hugh
Knight, Dame Jill (Bir'm E'st'n)


Eggar, Rt Hon Tim
Knox, Sir David


Elletson, Harold
Kynoch, George (Kincardine)


Emery, Rt Hon Sir Peter
Lait, Mrs Jacqui


Evans, David (Welwyn Hatfield)
Lamont, Rt Hon Norman


Evans, Jonathan (Brecon)
Lang, Rt Hon Ian


Evans, Nigel (Ribble Valley)
Lawrence, Sir Ivan


Evans, Roger (Monmouth)
Legg, Barry


Evennett, David
Leigh, Edward


Faber, David
Lennox-Boyd, Sir Mark


Fabricant, Michael
Lester, Sir James (Broxtowe)


Fenner, Dame Peggy
Lidington, David


Field, Barry (Isle of Wight)
Lilley, Rt Hon Peter


Fishburn, Dudley
Lloyd, Rt Hon Sir Peter (Fareham)


Forman, Nigel
Lord, Michael


Forsyth, Rt Hon Michael (Stirling)
Lyell, Rt Hon Sir Nicholas


Forth, Eric
MacGregor, Rt Hon John


Fowler, Rt Hon Sir Norman
MacKay, Andrew


Fox, Rt Hon Sir Marcus (Shipley)
Maclean, Rt Hon David


Freeman, Rt Hon Roger
McLoughlin, Patrick


French, Douglas
McNair-Wilson, Sir Patrick


Fry, Sir Peter
Madel, Sir David


Gale, Roger
Maitland, Lady Olga


Gallie, Phil
Malone, Gerald


Gardiner, Sir George
Mans, Keith


Garnier, Edward
Marland, Paul


Gill, Christopher
Marlow, Tony


Gillan, Cheryl
Marshall, John (Hendon S)


Goodlad, Rt Hon Alastair
Marshall, Sir Michael (Arundel)


Goodson-Wickes, Dr Charies
Martin, David (Portsmouth S)


Gorman, Mrs Teresa
Mates, Michael


Gorst, Sir John
Mawhinney, Rt Hon Dr Brian


Grant, Sir A (SW Cambs)
Mellor, Rt Hon David


Greenway, Harry (Ealing N)
Merchant, Piers


Greenway, John (Ryedale)
Mills, Iain


Griffiths, Peter (Portsmouth, N)
Mitchell, Andrew (Gedling)


Grylls, Sir Michael
Mitchell, Sir David (NW Hants)


Gummer, Rt Hon John Selwyn
Moate, Sir Roger


Hague, Rt Hon William
Monro, Rt Hon Sir Hector


Hamilton, Neil (Tatton)
Montgomery, Sir Fergus


Hampson, Dr Keith
Needham, Rt Hon Richard


Hannam, Sir John
Nelson, Anthony


Hargreaves, Andrew
Neubert, Sir Michael


Haselhurst, Sir Alan
Newton, Rt Hon Tony


Hawkins, Nick
Nicholls, Patrick


Hawksley, Warren
Nicholson, David (Taunton)


Hayes, Jerry
Norris, Steve


Heald, Oliver
Oppenheim, Phillip


Heathcoat-Amory, Rt Hon David
Ottaway, Richard


Hendry, Charies
Page, Richard


Higgins, Rt Hon Sir Terence
Paice, James


Hill, Sir James (Southampton Test)
Patnick, Sir Irvine


Hogg, Rt Hon Douglas (G'tham)
Patten, Rt Hon John


Horam, John
Pattie, Rt Hon Sir Geoffrey


Hordern, Rt Hon Sir Peter
Pawsey, James





Peacock, Mrs Elizabeth
Sykes, John


Pickles, Eric
Tapsell, Sir Peter


Porter, Barry (Wirral S)
Taylor, Ian (Esher)


Porter, David (Waveney)
Taylor, John M (Solihull)


Portillo, Rt Hon Michael
Taylor, Sir Teddy (Southend, E)


Powell, William (Corby)
Temple-Morris, Peter


Rathbone, Tim
Thomason, Roy


Redwood, Rt Hon John
Thompson, Sir Donald (C'er V)


Renton, Rt Hon Tim
Thompson, Patrick (Norwich N)


Richards, Rod
Thornton, Sir Malcolm


Riddick, Graham
Thurnham, Peter


Robathan, Andrew
Townend, John (Bridlington)


Roberts, Rt Hon Sir Wyn
Townsend, Cyril D (Bexl'yh'th)


Robertson, Raymond (Ab'd'n S)
Tracey, Richard


Robinson, Mark (Somerton)
Tredinnick, David


Roe, Mrs Marion (Broxboume)
Trend, Michael


Rowe, Andrew (Mid Kent)
Trotter, Neville


Rumbold, Rt Hon Dame Angela
Twinn, Dr Ian


Sackville, Tom
Vaughan, Sir Gerard


Sainsbury, Ftt Hon Sir Timothy
Viggers, Peter


Scott, Rt Hon Sir Nicholas
Waldegrave, Rt Hon William


Shaw, David (Dover)
Walden, George


Shaw, Sir Giles (Pudsey)
Walker, Bill (N Tayside)


Shephard, Rt Hon Gillian
Waller, Gary


Shepherd, Sir Colin (Hereford)
Ward, John


Shersby, Sir Michael
Wardle, Charles (Bexhill)


Sims, Sir Roger
Waterson, Nigel


Skeet, Sir Trevor
Watts, John


Smith, Tim (Beaconsfield)
Wells, Bowen


Soames, Nicholas
Whitney, Ray


Speed, Sir Keith
Whittingdale, John


Spencer, Sir Derek
Widdecombe, Ann


Spicer, Sir James (W Dorset)
Wiggin, Sir Jerry


Spicer, Sir Michael (S Worcs)
Wilkinson, John


Spink, Dr Robert
Willetts, David


Spring, Richard
Wilshire, David


Sproat, lain
Winterton, Mrs Ann (Congleton)


Squire, Robin (Homchurch)
Winterton, Nicholas (Macc'fld)


Stanley, Rt Hon Sir John
Wolfson, Mark


Steen, Anthony
Wood, Timothy


Stephen, Michael
Yeo, Tim


Stern, Michael
Young, Rt Hon Sir George


Stewart, Allan



Streeter, Gary
Tellers for the Noes:


Sumberg, David
Mr. Simon Burns and Dr. Liam Fox.


Sweeney, Walter

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MADAM DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House congratulates the Government on its privatisation of the former state energy sector; notes that its market-based energy policies have led to lower prices and better services for consumers; and looks forward to the further benefits to consumers which will flow from the opening up of the gas and electricity markets in 1998.

BUSINESS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Standing Order No. 14 (Exempted business),

>That, at this day's sitting, the Damages Bill [Lords] and the Trusts of Land and Appointment of Trustees Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. McLoughlin.]

Question agreed to.

Damages Bill [Lords]

As amended, in the Standing Committee, considered.

Clause 5

MEANING OF STRUCTURED SETTLEMENT

The Parliamentary Secretary, Lord Chancellor's Department (Mr. Gary Streeter): I beg to move amendment No. 1, in page 4, line 13, at end insert—

'(8) Where—

(a) an agreement is made settling a claim or action for damages for personal injury on terms whereby the damages are to consist wholly or partly of periodical payments;
(b) the person against whom the claim or action is brought (or, if he is insured against the claim, his insurer) purchases one or more annuities; and
(c) a subsequent agreement is made under which the annuity is, or the annuities are, assigned in favour of the person entitled to the payments (so as to secure that from a future date he receives the payments as the annuitant under the annuity or annuities),

then, for the purposes of section 4 above, the agreement settling the claim or action shall be treated as a structured settlement and any such annuity assigned in favour of that person shall be treated as an annuity purchased for him pursuant to the settlement.

(9) Subsections (2) to (7) above shall apply to an agreement to which subsection (8) above applies as they apply to a structured settlement as defined in subsection (1) above (the reference in subsection (6) to subsection (1)(b) being read as a reference to subsection (8)(b)).'.

The purpose of clauses 4 and 5 is to enhance the protection conferred on structured settlement beneficiaries by the Policyholders Protection Act 1975 from 90 to 100 per cent. When a new settlement is set up, an annuity is purchased for the beneficiary, and there is no problem. Clause 4 will give him 100 per cent. protection in the unlikely event—

Madam Deputy Speaker (Dame Janet Fookes): Order. I am sorry to interrupt the hon. Gentleman, but there is too much noise. Those who are wanting to engage in conversations, please go outside.

Mr. Streeter: I am grateful to you, Madam Deputy Speaker. I think that the voices are a chorus of support.
I am grateful to the hon. Member for Brent, South (Mr. Boateng) for tabling an amendment in Committee to draw attention to doubts about whether the clauses would always operate as they were intended to. There is doubt about whether the clauses would increase the protection in cases where the settlement had originally been set up on a different basis and the annuity was formally assigned to the beneficiary at a later date. That will most often be so when a settlement was made before the reforms that we introduced in the Finance Act 1995. Since those reforms, the parties to existing settlements can modify their arrangements, and usually it is sensible and more convenient for all if the annuity is assigned to the beneficiary.
This is a technical amendment to ensure completely that the enhanced policyholders' protection conferred by clause 4 will apply regardless of whether the person entitled to the payments becomes the policyholder of the

annuity that is central to the structured settlement. The amendment makes a good Bill better, and I commend it to the House.

Mr. Paul Boateng: The Opposition welcome the Government's positive response to the amendment that we tabled in Committee. It is a worthwhile and useful Bill and we wish it well.

Amendment agreed to.

Bill read the Third time, and passed, with amendments.

TRUSTS OF LAND AND APPOINTMENT OF TRUSTEES BILL [LORDS]

As amended, in the Standing Committee, considered.

Order for Third Reading read.—[Queen's consent and Prince of Wales's consent signified.]

Bill read the Third time, and passed, with amendments.

DELEGATED LEGISLATION

Madam Deputy Speaker (Dame Janet Fookes): With permission, I shall put together the motions relating to delegated legislation.

Motion made, and Question put forthwith, pursuant to Standing Order No. 101(6) (Standing Committees on Delegated Legislation),

EUROPEAN COMMUNITIES

That the draft European Communities (Definition of Treaties) (Euro-Mediterranean Agreement Establishing an Association between the European Communities and their Member States and the Republic of Tunisia) Order 1996, which was laid before this House on 10th June, be approved.

NORTHERN IRELAND

That the draft Explosives (Amendment) (Northern Ireland) Order 1996, which was laid before this House on 12th June, be approved.>

FEES AND CHARGES

That the draft Department of Transport (Fees) (Amendment) Order 1996, which was laid before this House on 17th June, be approved.

LOCAL GOVERNMENT

That the draft Local Authorities (Charges for Overseas Assistance and Public Path Orders) Regulations 1996, which were laid before this House on 20th June, be approved.

REPRESENTATION OF THE PEOPLE

That the draft Parliamentary Constituencies (England) (Miscellaneous Changes) Order 1996, which was laid before this House on 20th June, be approved.

ROAD TRAFFIC

That the draft Motor Vehicles (International Circulation) (Amendment) Order 1996, which was laid before this House on 26th June, be approved.

FAMILY LAW

That the draft Child Support (Miscellaneous Amendments) Regulations 1996, which were laid before this House on 26th June, be approved.—[Mr. McLoughlin.]

Question agreed to.

PETITION

Selby Bypass

Mr. Michael Alison: I rise to present a petition on behalf of approximately 5,000 signatories from the district of Selby in North Yorkshire. The petition reads:
That traffic congestion in the town of Selby severely disrupts its social and economic life and inhibits inward investment in the town.
Wherefore your Petitioners pray that your honourable House persuade the Department of Transport to construct a new bypass for the town as soon as the statutory bypass procedures have been completed.
The statutory procedures will be completed in the late summer, before the House returns in the autumn. Therefore, it is essential that the construction is put in hand as soon as practicable after that.

To lie upon the Table.

Stone of Destiny

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]

Mr. Bill Walker: I welcome the opportunity to speak on an important constitutional matter. When my right hon. Friend the Prime Minister announced on Wednesday 3 July that, on the advice of Ministers, the Queen had agreed that the Stone of Destiny—which I call the Stone of Scone—should be returned to Scotland, I asked him a question, which I now repeat:
My right hon. Friend will be aware that Scone is in my constituency. The ancient capital of Scotland would be proud to have the stone back and I hope that, when consideration is given to its location, its roots will be remembered."—[0fficial Report, 3 July 1996; Vol. 280, c. 974]
As I was the first hon. Member to be called after the Front-Bench spokesmen, I can justifiably claim to be the first person to request that the stone be returned to Scone. I welcome the fact that many individuals and groups have since joined me in my request.
I notice that the hon. Member for Perth and Kinross (Ms Cunningham), who is in her place, has been getting some copy in the local press. She has given the impression that the city of Perth has a claim to Scone. I should make it quite clear that Scone is in my constituency and will remain in my constituency after the boundary changes. The hon. Lady has been getting what I consider to be not very good publicity for the Stone of Scone, when she was reported in The Courier last Saturday as saying:
We ask for jobs and they give us a stone.
I find that quite sad and depressing.
I find it even more sad and depressing that the hon. Lady should write to me, on stationery on which the signature is obviously printed, asking me to support a petition launching a request for the Stone of Scone to be returned to Perthshire. That is a bit much, given that Scone is in my constituency—

Ms Roseanna Cunningham: Will the hon. Gentleman give way?

Mr. Walker: No, I shall not give way to the hon. Lady. [Interruption.] This is an Adjournment debate, and one does not give way in an Adjournment debate unless one has previously made arrangements to do so.

Mr. Alex Salmond: On a point of order, Mr. Deputy Speaker.

Mr. Walker: I even welcome those who were less than enthusiastic—

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. There is a point of order.

Mr. Salmond: Will you confirm, Mr. Deputy Speaker, that this is an Adjournment debate, with the rules attending to an Adjournment debate, and that we are not


debating the excellent parliamentary performance of my hon. Friend the Member for Perth and Kinross (Ms Cunningham)—

Mr. Deputy Speaker: Order. That was a waste of time, because the hon. Gentleman knows full well that that is not a point of order for me.

Mr. Walker: Thank you, Mr. Deputy Speaker. That sort of action does two things: it destroys the credibility of the case and it demeans those involved.
I believe that we should welcome even those who were less than enthusiastic about the decision to return the stone to Scotland. I shall say more about the Perthshire petition later, because it is important. As everyone knows, the reason given for returning the stone to Scotland was that it is the 700th anniversary of its theft from Scone abbey.
The logic behind that calls for the stone to be returned to the place whence it was stolen. I know that Scone abbey no longer exists, so there will be pressure to place the stone in a suitably consecrated building. We cannot rebuild the abbey, although I can see the merit in building a suitable place of worship in the difficult and dangerous world in which we live. Sadly, Scotland already has too many empty or half-empty places of worship, so rebuilding the abbey is not a realistic or viable option.
So what am I proposing? On Friday 5 July, the Prime Minister, the Secretary of State for Scotland and many of Scotland's Members of Parliament paid a visit to a special building in Dumfries that houses the remains of Scotland's bard, Robert Burns. My proposal is that the Burns example can be a guide to what we should do with the stone.
A suitable building should be built on the site of the abbey. It would not need to be large—just big enough to house the stone, with sufficient space for the many visitors who would be expected. It would need to be a secure building and, as it would be on the old abbey site, it could be a properly consecrated building.

Sir Michael Neubert: Does my hon. Friend know that one of the misgivings that some of us have had about the decision is that insufficient attention has been given to the stone's religious connotations? Does he therefore accept the fact that his support for the principle that it be held on consecrated ground is greatly to be welcomed?

Mr. Walker: I thank my hon. Friend for that intervention, and I shall say more about consecrated ground later. The building must also be open to the public throughout the year.
I shall now talk about the history of the stone, because I believe that other parts of Scotland will claim that the stone should be brought to them. Legend has it that the stone's history goes back to the time when Jacob used it as a pillow when, as is described in the Bible, he rested his head in Bethel. There is also the somewhat romantic view that the stone arrived in Scotland via Egypt, Spain and Ireland.
It is also claimed by some that Irish kings sat on the sandstone slab when they were crowned, and it is further claimed that the stone groaned if the sitter was royal but

stayed ominously silent if he was a pretender. I have no knowledge of the stone groaning during the past 700 years, or before that when it was located in Scone.
I understand that the stone was brought to Scone during the ninth century. In 838 AD, Kenneth MacAlpin, King of Scots, brought the stone to Scone. For almost 500 years, it was at Scone. In accordance with custom, the King of Scots was not crowned at the beginning of his reign but was "set upon the stone". Scone was the legendary crowning seat of the kings of Scotland, and 48 kings of Scotland were crowned there, including Macbeth and Robert the Bruce.
In 1296, King Edward I of England—known in history as the "Hammer of the Scots"—removed the stone from Scone abbey. Some claim that the stone stolen may not have been Stone of Scone, and that the abbott and his monks switched stones. Be that as it may—what cannot be disputed is that Edward I removed what he believed to be the Stone of Scone, or the Stone of Destiny. The stone removed to Westminster abbey was used in the coronation of English and then British monarchs after James VI of Scotland became James I of Britain. The stone was certainly believed to be genuine and was used for those purposes.
What also is not in dispute is that on Christmas day 1950, a group of Scottish nationalists believed the stone at Westminster was the Stone of Scone, because they removed the stone from Westminster abbey and returned it to Scotland. I understand that the papers about this and other matters concerning the stone have been released today. I also understand that the papers confirm that the stone in the abbey at Westminster is the stone that was removed by the nationalists in 1950.
The 1970 files have been examined, and I understand that the national library of Scotland has been convinced by the X-rays that show the position of the bolt used in the repair to the damage caused during the removal from Westminster abbey on Christmas day 1950. I also understand that a clerk of works at Westminster abbey, William Bishop, examined the returned stone and declared it to be the stone that he had earlier examined in detail while it had been in the abbey before Christmas day 1950.
In 1984, the late and sadly missed Donald Stewart moved a motion in the House calling for the stone at Westminster to be returned to Scotland. The motion said:
Its retention in England all this time is outrageous and unjustified.
So Donald Stewart and his nationalist colleagues believed the stone at Westminster to be genuine at that time—otherwise he would not have moved the motion.
Then there was the promise, or pledge, given to return the stone to Scotland. The 14th-century treaty of Northampton decreed that the stone should
be returned to the place from whence it caim.
We all know "from whence it caim"—from Scone in my constituency.
Perth and Kinross council, the Perthshire tourist board and the Perthshire chamber of commerce—supported by the Earl and Countess of Mansfield, the owners of Scone palace—have initiated a claim of right petition. That petition is designed to press the case for bringing the famous symbol of Scotland back to the place "from whence it caim"—Scone.
It is clear that the Government's advice to the Queen to return the stone to Scotland was good advice, and the people of Scotland, in the main, have responded positively. Even the politicians who made rude comments at the time of the Prime Minister's statement now have to acknowledge that the people of Scotland, in the main, have welcomed the Government's advice to return the stone to Scotland. The stone is a great exciter of public opinion, and the debate today is about where the returned stone should be located.
Arbroath has made a claim and I understand that Argyll, Stirling and Edinburgh have also declared that the stone should be located in their areas. Robbie the Pict, not to be outdone, has suggested that the middle of the North sea is where the stone should be deposited. Perhaps he meant that the new age travellers who gave us all the trouble at Dunnichen should be deposited in the middle of the North sea.
There is also the matter of the stone's links with religion and the idea, which I support, that wherever the stone is housed in Scotland, it must be in a suitable building on consecrated ground. It is also claimed that the stone should be located with other Scottish regalia. The proposal for a kingship centre on the site of Scone abbey meets all the requirements of history, as well as those of the stone's relationship with religious belief.
A kingship centre at Scone, with its links with Kenneth MacAlpin, Macbeth and Robert the Bruce, is the only realistic way to give the returned stone a suitable, prestigious home in Scotland. I do not expect my right hon. Friend the Minister to give me an answer this evening, but I expect that the claim of Scone will be given the full and proper consideration that it merits.
I cannot pretend that I was not surprised by the statement of my right hon. Friend the Prime Minister, yet following the anniversary of the second world war and the public reaction to such events of recent British history, I should not have been surprised. People, including the Prime Minister and my right hon. Friend the Secretary of State for Scotland, care deeply about the Union, the monarchy and our history. The more I think about the need to recognise the importance of history and the place that symbols and events have in the minds of the people, the more I realise how in this insecure and dangerous world it is wise to acknowledge the importance of the Union of the Crowns and of the 1707 Act of Union.
The Stone of Scone is much more than a piece of sandstone; it is a symbol of Scotland as a separate, unique nation. It is also a symbol of the Union between Scotland and England—a Union that I believe has brought great benefits to all its parts. That is why I believe that it was right to make the advice to the Queen and why I was so pleased that Madam Speaker agreed to this debate. I am proud to be a Scot; I am also proud to be British. The Stone of Scone—the Stone of Destiny—is a symbol of Scotland and Britain. It is part of the cement that holds the Union together. Returning the stone strengthens the Union.
The Government were right to advise the Queen to honour the 14th-century treaty of Northampton and return the stone. Returning it to the place "from whence it cairn" could not be more clear or precise. It means returning the stone to Scone and building a kingship centre at the site of Scone abbey—consecrated ground. It means building a

centre worthy of the stone by public subscription so that the centre, like the stone, will belong to the people and to the present and future monarchs of Scotland and Britain.

The Minister of State, Scottish Office (Lord James Douglas-Hamilton): I warmly congratulate my hon. Friend the Member for North Tayside (Mr. Walker) on securing this debate, on highlighting the close relationship between Scone in his constituency and the Stone of Destiny and on the persuasive way in which he advanced his case. There are many Scottish Members present, but none from the Labour party or the Liberal Democrats. That will be noted.
The Stone of Destiny is the premier symbol of Scottish kingship and, consequently, an embodiment of our cultural and historical identity. It was associated with the enthronement of Scottish kings as far back as 840 AD, when—as my hon. Friend suggested—Kenneth MacAlpin, King of Scots, took it to Scone.
The stone's legendary origins, however, are much more ancient. It was mythologically identified with the biblical Jacob's pillow—as narrated in Genesis 28, 10–12—when he dreamed of a ladder to heaven,
And he took of the stones of that place, and put them for his pillows, and lay down in that place to sleep.
Exactly 700 years ago, in 1296, King Edward I of England invaded Scotland and removed the stone from Scone abbey, a building that has since been completely demolished. King Edward's claim to the stone was by right of conquest, but that fiercely contested and short-lived claim lapsed in 1328, when, as an ancillary arrangement attached to the treaty of Northampton, King Edward III ordered the stone's return to Scotland. A writ to that effect was issued on 1 July 1328 under the Privy Seal. The King's writ was defied by the stone's then custodian, and Queen Isabella, the Queen Mother, who was to have taken it north, departed without it.
Against that background, the Prime Minister's historic announcement to the House on 3 July 1996 could be regarded as a belated carrying out of the wishes of Edward III and of English obligations under the treaty of Northampton. In contemporary terms, it should be seen as a gesture of good will to the Scottish people and a confident assertion of their full and equal partnership in the Union.
As my right hon. Friend the Prime Minister stated:
After 700 years, it is right to recognise the importance of the stone to the Scottish nation."—[Official Report, 3 July 1996; Vol. 280, c. 974.]
That importance is evidenced by the vigorous debate taking place across Scotland, as an ever-growing number of venues and communities, such as that represented by my hon. Friend the Member for North Tayside and his constituents, press their rival claims to house the Stone of Destiny. Further testimony is provided by the volume of correspondence in the Scottish and British press.

Ms Roseanna Cunningham: Will the right hon. Gentleman give way?

Lord James Douglas-Hamilton: No; I must deal with the many points made in my hon. Friend's speech.


The Prime Minister announced that Scottish and Church opinion would be consulted. Accordingly, today we have issued a consultation paper, which has been circulated to all appropriate organisations and individuals, inviting the general public to contribute their views on the disposition of the stone. The hon. Member for Perth and Kinross (Ms Cunningham), like all hon. Members, will be able to send her representations on behalf of her constituents.

Ms Cunningham: Will the right hon. Gentleman give way?

Lord James Douglas-Hamilton: No. This debate was initiated by my hon. Friend the Member for North Tayside, and I must deal with the points that he made. The hon. Member for Perth and Kinross will have an opportunity in due course.
Since the measures that we have announced would be meaningless without public confidence in the stone's authenticity, about which rumours have abounded since its temporary removal from the abbey in 1950, we have today published the confidential files relating to the authentication tests carried out on the stone.
The newly published documentation consists of a set of six files relating to the removal of the Stone of Destiny in 1950 and its return in 1951. The file that is likely to command the greatest public interest is that dealing with authentication, Scottish Record Office file HH41/2099. The investigation that it records was triggered in response to claims advanced in 1972 that the "real" Stone of Destiny was lodged in St Columba's church, Lochee, in Dundee. Bailie Robert Gray, a monumental sculptor in Glasgow, had repaired the stolen stone, and the inquiry was concerned to establish that no last-minute substitution had taken place before its return.
The papers record the very firm conclusions of William Kerr, chief constable of Dunbartonshire—who had been the detective inspector in charge of the hunt for the stone in 1951—that the real stone was returned. They also include a report, in 1951, from the clerk of works at Westminster abbey, setting out his reasons for being certain that the stone that was returned was genuine.
In scientific terms, the papers include a report of July 1973 from the Home Office police scientific development branch of a radiographic examination of the stone, which confirms that it was broken and was repaired by insertion of three metal bolts. That confirms Chief Constable Kerr's report that the original stone had been repaired in that manner while it was in Bailie Gray's care. All that supports the testimony of Ian Hamilton, QC—one of my brother advocates, and one of the four who took the stone in 1950—that the returned stone was authentic.
On the consultation process and the criteria that should apply in determining where the stone should be housed, the consultation paper states:
The place where the Stone is housed should clearly have strong links with the historic past and the surroundings should support and enhance the solemn and historic significance of the Stone itself and should be devoid of incongruous features which might conflict with that. The physical arrangements and ambient conditions for housing and displaying the Stone should be fitting and dignified; both these and the general location should meet the most stringent security requirements.

Accessibility is clearly important. The Stone is presently housed in Westminster Abbey which is open to the public throughout the year and is visited by very large numbers of people. The Stone's new Scottish home should similarly be readily accessible, open all year round and capable of accommodating a continuing high level of visitors without strain. It should also be capable of offering interpretative material of high quality which helps visitors to understand the Stone's historic and ceremonial significance.
Clearly, the Stone should be kept in a place of solemn character. It is currently housed on consecrated ground and there is obviously a case for considering whether its Scottish home should be in a building set aside for religious purposes. Views are invited on this point.
We are inviting comments in response to the consultation paper from the public at large and from experts and those with a special interest. I hope that there will be a full and thoughtful response, so that a decision can be reached next month and arrangements made to bring the stone north and install it in its new Scottish home with suitable solemnity.
As my hon. Friend pointed out, the Prime Minister, in his statement of 3 July, said:
The stone might be displayed in Edinburgh castle alongside the Honours of Scotland, Europe's oldest crown jewels. Alternatively, it might be appropriate to place it in St. Margaret's chapel inside the castle or in St. Giles' cathedral. There may be other options."— [Official Report, 3 July 1996; Vol. 280, c. 973.]
My hon. Friend made an eloquent case, on behalf of his constituents, for bringing the stone to Scone. We shall certainly take that into account along with all the other representations that we receive. I am sure that he will understand that I cannot be drawn further tonight on where the final choice might lie.
I hope, however, that the whole House will join my hon. Friend and me in welcoming the decision that the stone should return to Scotland. The Stone of Destiny is the stuff of legend and history. It is dear to the hearts of the Scottish people. We all look forward to welcoming it home.
The decision to return the Stone of Destiny to Scotland was both historic and courageous. Inevitably, it has been attended by a degree of controversy. Much of that controversy, however, is based on misunderstanding. Let us be clear about the significance of this event.
Some commentators have seen this event as a precedent for repatriation of other historical objects. The Queen, advised by her Ministers, has every right to be consulted about the destination of her property within her realm. The transfer of the Stone of Destiny to Scotland in no way alienates it from the United Kingdom, within which it will still repose.
The stone will be returned for the coronation ceremonies of all future sovereigns of the United Kingdom. On those solemn occasions, the reuniting of the stone with the coronation chair will potently symbolise the Union of Scotland and England under the Crown of the United Kingdom. A century before there was a Union of the Parliaments, Scotland and England were joined by the Union of the Crowns, in 1603. At that time, the King of Scots peacefully inherited the throne of England, thus achieving, in peace and good will, what Edward I and Edward II had been frustrated from accomplishing by force 300 years earlier.
I warmly welcome the return of the Stone of Destiny to Scotland. It is fitting that, during the periods between coronations when it is not required to fulfil its solemn


function, it should repose in its historic homeland. But that homeland is also part of the United Kingdom, of which the Stone of Destiny is now a significant symbol.
My hon. Friend struck a strong chord with me when he said that he was proud to be a Scot. So am I and, like him, I am equally proud to be British. I hope that I shall never have to choose between the two. So, in a way. it is with the Stone of Destiny. It is part of the common heritage of Scotland and Britain. The recognition of its Scottish identity complements its vital role in cementing the combined sovereignty of the United Kingdom.
I strongly congratulate my hon. Friend on the service that he has done the House in allowing us to explore the matter further, and his representations will be taken into account. I value the reality—[Interruption.] The hon. Member for Perth and Kinross will have a chance to make representations.
I value the fact that the Secretary of State for Scotland and the Prime Minister had the foresight and vision to see that the matter was of tremendous importance to the Scots. It will never be forgotten by the Scots that this gesture has been made when there has been a refusal to make it for 700 years.

Mr. Salmond: On a point of order, Mr. Deputy Speaker.

Lord James Douglas-Hamilton: Nothing can detract from that point, not even the hon. Gentleman.

Mr. Salmond: On a point of order, Mr. Deputy Speaker. Is it in order, in an Adjournment debate, for the

Secretary of State for Scotland, clearly audible, to tell the Minister at the Dispatch Box to keep going, to exclude my hon. Friend—

Mr. Deputy Speaker: Order. That is again a bogus point of order. The Minister must have been in order—

Mr. Salmond: Balls.

Mr. Deputy Speaker: Order. Did I hear the hon. Gentleman right?

Mr. Salmond: Of course I would withdraw that remark, Mr. Deputy Speaker, and try to think of a parliamentary alternative, but I am objecting—

Mr. Deputy Speaker: Order. The hon. Gentleman certainly did not find a parliamentary alternative there. He was completely out of order. I take it that he has withdrawn.

Mr. Salmond: I withdraw the remark and submit, "Nonsense."

Question put and agreed to.

Adjourned accordingly at nine minutes to Eleven o'clock.